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BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA
[ADJUDICATION ORDER NO. CFD/APIL/AO/DRK-AKS/EAD3-619-643/163-188/ 2014]
__________________________________________________
UNDER SECTION 15 I OF SECURITIES AND EXCHANGE BOARD OF INDIA ACT,
1992 READ WITH RULE 5(1) OF SECURITIES AND EXCHANGE BOARD OF INDIA
(PROCEDURE FOR HOLDING INQUIRY AND IMPOSING PENALTIES BY
ADJUDICATING OFFICER) RULES, 1995
In respect of:
Mr. Bikramjit
Ahluwalia
(Promoter Group)

Ms. Sudarshan Walia
(Promoter Group)
Ms. Rohini Walia
(Promoter Group)
Ms. Rachna Uppal
(Promoter Group)
Mr. Madan Gopal
(Promoter Group)
Ahluwalia Builders &
Development Group
(Private) Limited
(Promoter Group)
Capricon Industrials
Ltd. (Promoter
Group)
Tidal Securities Pvt.
Ltd. (Promoter
Group)
Mr. Shobhit Uppal
(Promoter Group)
Mr. Vikas Ahluwalia
(Promoter Group)
Ms. Sudarshan
Ahluwalia
(Promoter Group)
Mr. Raj Kumar
Ahluwalia
(Promoter Group)
Mr. Santosh
Ahluwalia
(Promoter Group)
Mr. N N Rekhi
(Promoter Group)
Mr. Pradeep A. G.
(Promoter Group)
Ms. Mukta Ahluwalia
(Promoter Group)
Ms. Rohini S.
Ahluwalia
(Promoter Group)
Ahluwalia Contracts
(I) Limited
(Promoter Group)
Mr. MKG Pillai
(PAC)
Ms. Geeta Gopal
Krishnan
(PAC)
Ms. Sangeeta
Krishna Kumar
(PAC)
Mr. M. P. Vaidya
(PAC)
Ms. Ram Piari
(PAC)
Ms. Pushpa Rani
(PAC)
Ms. Raman Pal
(PAC)

________________________________________________________________
FACTS IN BRIEF
1. Securities and Exchange Board of India (hereinafter referred to as SEBI) while
examining the Letter of Offer filed by B. Braun Singapore Pte. Ltd. along with B. Braun
Melsungen AG to acquire 26% shares of the Ahlcon Parenterals (India) Ltd.
(hereinafter referred to as 'APIL') observed certain non compliance with regard to SEBI
(Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (hereinafter
referred to as Takeover Regulations).

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APPOINTMENT OF ADJUDICATING OFFICER
2. I was appointed as Adjudicating Officer under Section 15 I of the Securities and
Exchange Board of India Act, 1992 (hereinafter referred to as SEBI Act), read with
Rule 3 of Securities and Exchange Board of India (Procedure for Holding Inquiry and
Imposing Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred to as
Adjudication Rules) to inquire into and adjudge under Section 15H (ii) of the SEBI
Act for the violation of Regulations 11 (1) read with 14 (1) alleged to have been
committed by Mr. Bikramjit Ahluwalia, Ms. Sudarshan Walia, Ms. Rohini Walia, Ms.
Rachna Uppal, Mr. Madan Gopal, Ahluwalia Builders & Development Group (Private)
Limited, Capricon Industrials Ltd., Tidal Securities Pvt. Ltd., Mr. Shobhit Uppal, Mr.
Vikas Ahluwalia, Ms. Sudarshan Ahluwalia, Mr. Raj Kumar Ahluwalia, Mr. Santosh
Ahluwalia, Mr. N N Rekhi, Mr. Pradeep A. G., Ms. Mukta Ahluwalia, Ms. Rohini S.
Ahluwalia, Ahluwalia Contracts (I) Limited (Promoter Group / Noticees), Mr. MKG
Pillai, Ms. Sangeeta Krishna Kumar, Mr. M.P. Vaidya, Ms. Geeta Gopal Krishnan, Ms.
Ram Piari, Ms. Pushpa Rani and Ms. Raman Pal (PAC / Noticees) and the same was
communicated vide proceedings of the Whole Time Member appointing Adjudicating
Officer dated 29.05.2014.

SHOW CAUSE NOTICE, REPLY AND HEARING

3. A common Show Cause Notice No. A&E/EAD3/DRK-AKS/18337/2014 dated
26.06.2014 (herein after referred to as SCN) was sent to all the noticees by
Registered Post Acknowledgement Due (herein after referred to as 'RPAD') in terms of
the provisions of Rule 4 of the SEBI (Procedure for Holding Inquiry and Imposing
Penalties by Adjudicating Officer) Rules, 1995 requiring the noticees to show cause as
to why an inquiry should not be held against all the noticees and why penalty, if any,
should not be imposed on the all noticees under Section 15H (ii) of the SEBI Act. The
said SCN was affixed by SEBI Northern Regional Office, New Delhi (herein after
referred to as 'SEBI NRO') at the last known address of Mr. M.P. Vaidya on 24/07/2014
and was also uploaded on SEBI website under the heading "Unserved Summons /
Notices".

4. In the said SCN, it was alleged that 5.46% shares were acquired by the Promoter
Group along with PAC of APIL against the permissible limit of 5% under Regulation 11
(1) of the Takeover Regulations during the year 2000-2001.

5. Noticees vide their email dated 30.07.2014 and letter dated 11.08.2014 submitted a
common reply to the SCN as follows:
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During the period 2000-2001 Mr. Bikramjit Ahluwalia had acquired 2,49,000 shares
of 3.45% and others by 2.01% (including Promoters, PAC and Processional Director,
MD of the Company).

Noticees humbly submit that at the time of the impugned acquisition, Mr. Bikramjit
Ahluwalia, Mr.Sudershan Walia, Ms. Rohini Walia, Ms. Rachna Uppal, Mr. Madan
Gopal, Ahluwalia Builders & Development Group (Pvt.) Ltd., Capricorn Industrials
Ltd., Tidal Securities Pvt. Ltd., Mr. MKG Pillai, Ms. Sangeeta Krishna Kumar, Mr.
Pradeep Vaidya and Ms. Geeta Gopal Krishnan did not realize that any provisions
of Takeover Regulations were being violated. While noticees understand that the
same cannot be considered to be sufficient justification for absolving them, noticees
submit that the violation was inadvertent and that there was no willful and/or
deliberate intention on the part of them to violate any provisions of the law. Noticees
assure and promise that they will, henceforth, strictly adhere to the provisions of
Takeover Regulations.

Noticees further submit that, pursuant to the acquisition there was no change in the
management and control of the Company and no prejudice was suffered by the
investors/shareholders on account of the impugned acquisition. In the light of above,
noticees request to be pardoned for the aforementioned violation.

6. Noticees were granted an opportunity of hearing vide a common hearing notice dated
04.08.2014 to appear on 20.08.2014 at 03:00 pm at SEBI Bhavan, Mumbai. The
hearing notice was sent by RPAD. The said hearing noticee addressed to Mr. M.P.
Vaidya again came back undelivered. The same was again uploaded on SEBI website
under the heading "Unserved Summons / Notices". Noticees vide their letter dated
19.08.2014 authorised Mr. KRCV Seshachalam, Advocate (herein after referred to as
'AR') to represent them in the present matter. Noticees also requested to adjourn the
scheduled hearing for a period of 3 weeks as they didn't get the time to brief their
counsel due to the holidays.
7. Acceding to the request of the noticees, again vide common hearing notice dated
20.08.2014, noticees were granted a final opportunity of hearing on 04.09.2014 at
03:00 pm at SEBI Bhavan, Mumbai. Hearing notice addressed to Mr. M.P. Vaidya was
affixed at the last known address on 28.08.2014 by SEBI NRO and the same was also
uploaded on SEBI website under the heading "Unserved Summons / Notices".
8. At the time of hearing, the AR sought adjournment to file a further detailed reply to the
SCN. As requested by the AR, the AR was given time till 15.09.2014 to submit a
detailed reply to the SCN. Further, it was mutually agreed to schedule the next hearing
in the matter on 18.09.2014 at 03:00 pm at SEBI Bhavan, Mumbai. Noticees vide their
letter dated 15.09.2014 submitted a common detailed reply to the SCN as follows;
At the outset noticees deny that they had acquired 5.46% of the shares during the
relevant period. Noticees submit that the impugned acquisition was around 5.0346%
which was also done by Mr. Bikramjit Ahluwalia, Ms. Rohini S Ahluwalia, Ms.
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Rachna Uppal, Ahluwalia Builders & Development Group (Pvt.) Ltd., Capricorn
Industrials Ltd., Tidal Securities Pvt. Ltd., Mr. MKG Pillai, Ms. Sangeeta Krishna
Kumar and Ms. Geeta Gopal Krishnan (hereinafter referred to as 'Acquirer-
Noticees') on their own separately, without knowledge to each other about their
respective acquisition at the relevant time. Noticees submit that Mr. Madan Gopal
passed away and the other acquirers whereabouts are not available with Acquirer-
Noticees.

Acquirer-Noticees submit that they were separately holding following shares as on
31
st
March 2000. This constituted 3.946% of the total issued capital of APIL. The
details are as under:

Name Holding as on 31
st

March 2000
% of Holding as on
31
st
March 2000

Rohini S Ahluwalia 10 0.0001
Rachna Uppal 10 0.0001
(Late) Madan Gopal 10 0.0001
Ahluwalia Builders &
Development Group
(Private) Ltd.
1,09,000 1.514
Capricorn Industrials
Ltd.
60,000 0.833
Tidal Securitieis Pvt. Ltd. 84,500 1.174
MKG Pillai 20,000 0.278
Geeta Gopal Krishnan 300 0.004
Sangeeta Krishna
Kumar
300 0.004
M.P. Vaidya 10,000 0.139
Total 2,84,130 3.946%

The total holding of all the persons acting in concert as stated in the notice as on 31
st

March 2000 was 32,98,620 shares constituting 45.81%.

Acquirer-Noticees submit that during the period 2000-2001 they had acquired
independently, unknown to each other, shares of APIL from the open market in
different tranches as under. The details are summarized as under:

Name
Acquisition
during 2000-
2001
% of
acquisition
in 2000-2001


Bikramjit Ahluwalia 2,49,000 3.45%
Sudershan
Ahluwalia
Nil
Holding 10 shares
(0.0001%) as subscriber
to MOA
Rohini S Ahluwalia 16,600 0.231%
Rachna Uppal Nil Holding 10 shares
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(0.0001%) as subscriber
to MOA
Madan Gopal Nil
Holding 10 shares
(0.0001%) as subscriber
to MOA
Ahluwalia Builders &
Development Group
(Private) Ltd
10,000 0.139
Capricorn Industries
Ltd.
23,000 0.319
Tidal Securities Pvt.
Ltd.
84,500 1.17
Mkg Pillai Nil
Holding (20000)
shares (0.278%)
acquired in Public Issue.
Geeta Gopal
Krishan
Nil
Holding (300) shares
(0.004) acquired in
public Issue
Sangeeta Krishna
Kumar
Nil
Holding (300) shares
(0.004) acquired in
Public Issue.
M.P. Vaidya Nil
Holding (10000)
shares (0.139%)
acquired in Public Issue.
Total : 3,83,100 5.032%

Acquirer-Noticees submit that from the above, Mr. MKG Pillai 20,000 (0.278%), Ms.
Geeta Gopal Krishnan 300 (0.004%), Ms. Sangeeta Krishna Kumar 300 (0.004%),
and Mr. M.P. Vaidya 10,000 (1.39%) acquired shares in the initial public offering
(IPO) itself and these acquisitions were not made during the financial year
mentioned above. These shares were not shown as holding by PAC/ Promoters in
the earlier financial years due to mistaken interpretation of Takeover Regulations.

Acquirer-Noticees further submit that as can be seen from the above table, Mr.
Sudershan Ahluwalai, Ms. Rachna Uppal, Mr. Madan Gopal each shown to have
acquired 10 shares each. It is submitted that these are not fresh acquisition and
these shares were held by them as original subscribers to the Memorandum of
Association, which the APIL failed to show as their holding in the subsequent filings
after IPO. The shares which were shown as acquired in during 2000-2001 but in fact
acquired during IPO/ subscribed to MOA are as under:

Name Acquisition during
2000-2001
% of acquisition
2000-2001
Sudershan Ahluwalia
+
Rachna Uppal +
Madan Gopal
10+10+10=30 (MOA) 0.0004
MKG Pillai 20,000 (IPO) 0.278
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Geeta Gopal
Krishnan
300 (IPO) 0.004
Sangeeta Krishna
Kumar
300 (IPO) 0.004
M.P. Vaidya 10,000 (IPO) 0.139
Total 30,630 0.4254

If we take away these acquisitions from the total impugned acquisitions, the total
acquired percentage would come to 5.0346%. Acquirer-Noticees respectfully submit
that this fraction of 0.346% (2,491 shares) may kindly be ignored as oversight and
they submit that but for this miniscule fraction, this acquisition is within the threshold
limit prescribed under the Regulation.

Acquirer-Noticees submit that the above acquisitions were done with a sole view to
consolidate their individual holdings in the APIL, within the limits prescribed under
the Regulations. They had no intention to cross the threshold limit of 5% while
acquiring the shares as above.

Acquirer-Noticees further submit that during the said period, the target Company
APIL was under BIFR proceedings and there was no trading taking place on stock
exchanges in the shares of APIL. Hence, even this miniscule acquisition did not
have any bearing on the investors.

They had complied with stipulation of reporting under Regulations 7(1), 7 (1A) of the
Takeover Regulations. The Company had also complied in Regulation 7(3) of the
said Regulation within the stipulated time.

9. Apart from Mr. KRCV Seshachalam, noticees also authorised Mr. S.K. Sachdeva, CFO
of Ahluwalia Contracts (India) Ltd. to represent them in the matter. At the time of the
hearing, the ARs reiterated the submissions made in the replies dated 30.07.2014,
11.08.2014 and 15.09.2014. The ARs submitted that the infractions are miniscule
except the acquisition made during the period 27.07.2010 to 04.08.2010 and in one
instance the excess shares were sold. Therefore, the ARs requested to take a lenient
view in the matter. The ARs submitted that as per their understanding of second
proviso to Regulation 11(2) of the Takeover Regulations, the acquisition of 5% shares
or voting rights can be made in each financial year provided the overall shareholding
does not cross 75%. The ARs submitted that as per their understanding in the financial
year 2000-2001 the creeping acquisition limit was 10% for each financial year under
Regulation 11(1) of the Takeover Regulations which was subsequently brought down
to 5% in the year 2002. The ARs undertook to submit a copy of the Prospectus of
Ahlcon Parenterals (India) Ltd., documentary proof regarding the target company being
under BIFR and additional submissions if any on or before September 22, 2014.
Accordingly, noticees vide their email dated 20.09.2014 submitted the aforesaid
documents.

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CONSIDERATION OF EVIDENCE AND FINDINGS

10. I have taken into consideration the facts and circumstances of the case and the
material made available on record.
11. Mr. Bikramjit Ahluwalia, Ms. Rohini S Ahluwalia, Ms. Rachna Uppal, Ahluwalia Builders
& Development Group (Pvt.) Ltd., Capricorn Industrials Ltd., Tidal Securities Pvt. Ltd.,
Mr. MKG Pillai, Ms. Sangeeta Krishna Kumar and Ms. Geeta Gopal Krishnan (herein
after referred to as 'Acquirer- Noticees') have submitted that during the year 2000-
2001, they had acquired 5.0346% shares and not 5.46% as alleged in the SCN.
12. Noticees have submitted that Mr. MKG Pillai had acquired 20,000 shares (0.278%),
Ms. Geeta Gopal Krishnan had acquired 300 shares (0.004%), Ms. Sangeeta Krishna
Kumar had acquired 300 shares (0.004%), and Mr. M.P. Vaidya had acquired 10,000
shares (1.39%) in the initial public offering (herein after referred to as 'IPO') itself i.e. in
January 1994 and Mr. Sudershan Ahluwalia, Ms. Rachna Uppal and Mr. Madan Gopal
each had acquired 10 shares as original subscribers to the Memorandum of
Association. The aforesaid acquisitions were not disclosed in the subsequent filings
after the IPO. Noticees submission that the aforesaid shares were not shown as
holding by Promoters / PAC in the earlier financial years due to mistaken interpretation
of Takeover Regulations is not acceptable.
13. The acquisition of 5.0346% by the Acquirer-Noticees during the year 2000-2001 is not
in dispute.
14. Regulation 11 of the Takeover Regulations makes provision for public announcement
in case of consolidation of holdings. A bare reading of Regulation 11 (1) of the
Takeover Regulations makes it clear that any acquirer who has 15% but less than 75%
of the shares or voting rights in a company acquires any additional share or voting right
in the company which entitles him to exercise more than 5% of the voting rights in any
period of 12 months has to make a public announcement. As per Regulation 14 (1) of
the Takeover Regulations the said public announcement has to be made not later than
4 working days.

15. In the present matter, Acquirer-Noticees had actually acquired 5.0346% shares during
the year 2000-2001 as submitted by them as opposed to 5.46% as alleged in the SCN.
Since the Acquirer-Noticees had acquired additional shares (0.0346% i.e. 2491 shares)
which entitled them to exercise more than 5% of the voting rights, the statutory
embargo to the effect that the acquirer must make a public announcement to acquire
any additional shares in accordance with the Regulation comes into operation which
the noticees have failed to comply with.
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16. The ARs at the time of hearing submitted that as per their understanding in the financial
year 2000-2001 the creeping acquisition limit was 10% for each financial year under
Regulation 11(1) of the Takeover Regulations which was subsequently brought down
to 5% in the year 2002. The said understanding of the ARs is not correct in view of the
following facts. 5% creeping acquisition was in effect from 28.10.1998 to 23.10.2001
and the current acquisition was in the financial year 2000-2001. 10% creeping
acquisition was in effect from 24.10.2001 till it was substituted for 5% again on
09.09.2002.
17. Over here, I would like to quote the order of the Honble Supreme Court of India in
Swedish Match AB & Anr. Vs SEBI dated 25.08.2004 wherein it was held as follows:
..Indisputably, the purport and object of which a regulation is made must be duly
fulfilled. Public announcement is at the base of Regulations 10, 11 and 12. Except
in a situation which would bring the case within one or the other 'exception
clause', the requirement of complying with the mandatory requirements to make
public announcement cannot be dispensed with..."

18. In view of the above discussions and Hon'ble Supreme Court of India's Order, it can be
concluded that the noticees have failed to comply with Regulations 11 (1) read with 14
(1) of the Takeover Regulations for the aforesaid transactions. The text of the said
provisions are as follows:
SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997

Consolidation of holdings

11. (1) No acquirer who, together with persons acting in concert with him, has acquired, in
accordance with the provisions of law, 15 per cent or more but not more than 75% of the
shares or voting rights in a company, shall acquire, either by himself or through or with
persons acting in concert with him, additional shares or voting rights entitling him to exercise
more than 5% of the voting rights, in any period of 12 months, unless such acquirer makes a
public announcement to acquire shares in accordance with the Regulations.

Timing of the public announcement of offer.

14. (1) The public announcement referred to in regulation 10 or regulation 11 shall be made
by the merchant banker not later than four working days of entering into an agreement for
acquisition of shares or voting rights or deciding to acquire shares or voting rights exceeding
the respective percentage specified therein:

19. The said failure attracts penalty under Section 15H (ii) of the SEBI Act. The text of the
said provision is as follows:
SEBI Act
Penalty for non-disclosure of acquisition of shares and takeovers.

15H. If any person, who is required under this Act or any rules or regulations made
thereunder, fails to,
...
(ii) make a public announcement to acquire shares at a minimum price;
...
he shall be liable to a penalty of twenty-five crore rupees or three times the amount of profits
made out of such failure, whichever is higher.

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20. In this regard, the provisions of Section 15J of the SEBI Act and Rule 5 of the Rules
require that while adjudging the quantum of penalty, the adjudicating officer shall have
due regard to the following factors namely;
a. the amount of disproportionate gain or unfair advantage wherever
quantifiable, made as a result of the default
b. the amount of loss caused to an investor or group of investors as a
result of the default
c. the repetitive nature of the default

21. The material made available on record has not quantified the amount of
disproportionate gain or unfair advantage made as a result of noticees default. There is
also no material made available on record to assess the amount of loss caused to an
investor or group of investors as a result of noticees default. It has been observed from
the material made available on record that 2 noticees namely Mr. Madan Gopal and Mr.
N.N. Rekhi have expired and therefore the current proceedings against them are
abated.
22. In view of the abovementioned discussions, conclusion and after considering the factors
under Section 15J of the SEBI Act, I hereby impose a penalty of ` 15,00,000/- (Rupees
Fifteen Lakh only) jointly and severally on all the rest of the noticess mentioned at para
2 of this adjudication order under Section 15H (ii) of the Securities and Exchange Board
of India Act, 1992 which is appropriate in the facts and circumstances of the case.
ORDER
23. In exercise of the powers conferred under Section 15 I of the Securities and Exchange
Board of India Act, 1992, and Rule 5 of Securities and Exchange Board of India
(Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules,
1995, I hereby impose a penalty of ` 15,00,000/- (Rupees Fifteen Lakh only) jointly and
severally on all the noticees viz Mr. Bikramjit Ahluwalia, Ms. Sudarshan Walia, Ms.
Rohini Walia, Ms. Rachna Uppal, Ahluwalia Builders & Development Group (Private)
Limited, Capricon Industrials Ltd., Tidal Securities Pvt. Ltd., Mr. Shobhit Uppal, Mr.
Vikas Ahluwalia, Ms. Sudarshan Ahluwalia, Mr. Raj Kumar Ahluwalia, Mr. Santosh
Ahluwalia, Mr. Pradeep A. G., Ms. Mukta Ahluwalia, Ms. Rohini S. Ahluwalia, Ahluwalia
Contracts (I) Limited, Mr. MKG Pillai, Ms. Sangeeta Krishna Kumar, Mr. M.P. Vaidya,
Ms. Geeta Gopal Krishnan, Ms. Ram Piari, Ms. Pushpa Rani and Ms. Raman Pal in
terms of the provisions of Section 15H (ii) of the Securities and Exchange Board of India
Act 1992 for the failure to comply with Regulations 11 (1) read with 14 (1) of SEBI
(Substantial Acquisition of Shares and Takeovers) Regulations, 1997. In the facts and
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circumstances of the case, I am of the view that the said penalty is commensurate with
the default committed by all the noticees mentioned herein above.

24. The penalty shall be paid by way of Demand Draft drawn in favour of SEBI Penalties
Remittable to Government of India payable at Mumbai within 45 days of receipt of this
order. The said demand draft shall be forwarded to Chief General Manager- CFD,
Securities and Exchange Board of India, Plot No. C4-A, G Block, Bandra Kurla
Complex, Bandra (E), Mumbai 400 051.

25. In terms of the provisions of Rule 6 of the Securities and Exchange Board of India
(Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules
1995, copies of this order are being sent to all the noticees and also to the Securities
and Exchange Board of India, Mumbai.




Place: Mumbai D. RAVI KUMAR
CHIEF GENERAL MANAGER &
Date: 30.09.2014 ADJUDICATING OFFICER
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