BEFORETHEADJUDICATINGOFFICER

SECURITIESANDEXCHANGEBOARDOFINDIA
[ADJUDICATIONORDERNO.AK/AO67/2016]
______________________________________________________________________________
UNDERSECTION15IOFSECURITIESANDEXCHANGEBOARDOFINDIAACT,1992READWITHRULE5
OFSEBI(PROCEDUREFORHOLDINGINQUIRYANDIMPOSINGPENALTIESBYADJUDICATINGOFFICER)
RULES,1995
Inrespectof
M/s.GajanandInfracon Private Limited (PAN No.AADCG8052G); M/s. Yash Infra Realty Private
Limited(PANNo.AAACY4522E)

Inthematterof
M/s.ShekhawatiPolyYarn
Ltd______________________________________________________________________________

FACTSOFTHECASE

1. Securities & Exchange Board of India (hereinafter referred to as SEBI) observed that M/s.
GajanandInfraconPrivateLimited(hereinafterreferredtoasGajanand)andM/s.YashInfraRealty
Private Limited (hereinafter referred to as Yash) (collectively referred to as theNoticees) had
acquired shares of M/s. Shekhawati PolyYarn Limited (hereinafter referred to as the the
Company) during May 2013, pursuant to which the holding of each of the
Noticeesnamely,GajanandandYashhadexceeded5%ofthesharesorvotingrightsinthecompany.
However,nodisclosureundertherelevantprovisionsoftheSecuritiesandExchangeBoardofIndia
(SubstantialAcquisitionofSharesandTakeovers)Regulations,2011(hereinafterreferredtoasthe
TakeoverRegulations)weremadebytheNoticees.Basedonthesaidinformationwithrespectto
thenoncomplianceofTakeoverRegulations,AdjudicationproceedingsunderChapterVIAofSEBI
Act,1992(hereinafterreferredtoasSEBIAct)wereinitiatedagainsttheNoticeesunderSec15A
(b) of SEBI Act to inquire into and adjudicate the alleged violation of the provision of Regulation
29(1)readwith29(3)oftheTakeoverRegulations.ThesharesofthecompanywerelistedatBombay
StockExchangeLtd.(hereinafterreferredtoastheBSE)andNationalStockExchangeofIndiaLtd.
(hereinafterreferredtoastheNSE).

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APPOINTMENTOFADJUDICATINGOFFICER

2. The undersigned was appointed as the Adjudicating Officer vide Order dated November 01,
2013under Section 15I of the SEBI Act read with rule 3 of SEBI Rules to inquire into and adjudge
underSection15A(b)oftheSEBIActfortheallegedviolationofRegulation29(1)readwith29(3)of
theTakeoverRegulationscommittedbytheNoticees.

SHOWCAUSENOTICE,REPLYANDPERSONALHEARING

3. Two

separateShow

Cause

Notice

(hereinafter

referred

to

as

SCNs)

Ref

No.EAD6/AK/VRP/9189/2014andEAD6/AK/VRP/9190/2014,eachdatedMarch26,2014,wereissued
to the Noticees under Rule 4(1) of SEBI Rulescommunicating the alleged violation of Takeover
Regulationsasdetailedbelow:
Nameofthe Dateof
Pre
Pre
Shares
Post
Post DueDate Actualdate
Entity transaction acquisition acquisition acquired acquisition acquisition
of
of
holdingof holdingin
holdingof holdingin complianc compliance
shares
%
shares
%
e

M/s. 04.05.2013* 1,07,39,049

GajanandIn
fracon
Private
Limited
M/s.Yash 07.05.2013* 91,75,000
Infra
Realty
Private
Limited

4.88%

21,00,000 1,28,39,049

5.83%

4.17%

50,00,490 1,41,75,490

6.44%

Delay
disclosure
and/or non
compliance
of
provisions

07.05.13NotComplied Reg29(1)
r/w29(3)of
Takeover
Regulations

09.05.13NotComplied Reg29(1)
r/w29(3)of
Takeover
Regulations

*30.04.2013asperthecontractnotessubmittedbytheNoticeeGajanand.
*02.05.2013asperthecontractnotessubmittedbytheNoticeeYash.

4. TheNoticeesvidetheaforesaidSCNswerecalledupontoshowcauseastowhyaninquiryshould
notbeinitiatedagainstthemandpenaltybenotimposedunderSection15A(b)oftheSEBIActfor
theallegedviolations.

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5. TheSCNsenttotheNoticeeGajanandat211,LohaBhavan,3ndFloor,NearGujaratHighCourtwas
returned undelivered with remarks left place.Vide letter dated April 21, 2014, the same was re
sent at the registered address at A208, Infinity, Besides Ramada Hotel, Corporate Road,
Prahladnagar, Ahmedabad, Gujarat 380 015 as available from the web, however, the same was
also returned undelivered with remarks left.Upon enquiring about the correct address of
NoticeeGajanandwith M/s. Satyaprabhu Infrastructure Pvt Ltd.,one of the promoters acting in
concertwiththeNoticeeGajanand,acallwasreceivedfromoneKetanShah,ComplianceOfficerof
theNoticeeGajanand,whostatedthattheofficehadbeenclosedforfewdaysandprovidedanemail
idoftheNoticeeGajanand.Hence,videemaildatedJuly04,2014,ascannedcopyoftheSCNwas
senttothesaidemailaddressnamely,infra.info.gajanandinfracon@gmail.com.VideletterdatedJuly
15, 2014, the NoticeeGajanand acknowledged receipt of the copy of the SCN and sought to make
submissionstotheSCNinresponse.ThereaftervideletterdatedJuly23,2014,thecopyoftheSCN
alongwiththeAnnexureswerealsosentattheaddressobservedfromthecoverletterdatedJuly
15,2014.However,sincetheofficewasfoundlocked,thesaidSCNwasaffixedattheaddressofthe
NoticeeGajanandnamely, G908, Titanum City Center Office, Anand Nagar Road, Pralhad Nagar,
Ahmedabad,Gujarat380015.

6. Intheinterestofnaturaljusticeandintermsofrule4(3)oftheSEBIRules,anopportunityofhearing
was given to the NoticeeYash on July 09, 2014 vide hearing notice dated May 13, 2014. The
NoticeeGajanandwasalsograntedanopportunityofhearingonSeptember01,2014videhearing
noticedatedAugust12,2014.NoticeeYashfailedtoappearforthehearingonJuly09,2014.Hence,
another opportunity of personal hearing was given on August 05, 2014 vide hearing notice dated
July10,2014,however,theNoticeeYashagainfailedtoappearforthehearing.Afinalopportunity
ofhearingwasthereaftergrantedonSeptember01,2014videhearingnoticedatedAugust12,2014

7. TheNoticeeYashhasmadesubmissionsinthemattervidelettersdatedJuly21,2014andAugust28,
2014.TheNoticeeGajanandhasmadesubmissionsinthemattervidelettersdatedJuly28,2014and
August30,2014.DuringthepersonalhearingonSeptember01,2014,Mr.VinayChauhanandMr.
ApurvGupta,Advocates,AuthorizedRepresentatives(hereinafterreferredtoastheARs)appeared
on behalf of the Noticees andreiterated the submissions made by the Noticees in their respective
replieddatedasabove.TheNoticeesvidetheirrespectivereplieshaveinteraliastatedasfollows:

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7.1. That the date of transaction mentioned in the SCNs is incorrect. The NoticeeYash inter alia
stated that the transactions were entered on May 02, 2013 on both exchanges BSE and NSE,
whereas, the date mentioned in the SCN is May 07, 2013, hence factually incorrect.
NoticeeGajanandinteraliastatedthatthetransactionswereenteredonApril30,2013onboth
exchanges BSE and NSE, whereas, the date mentioned in the SCN is May 04, 2013, hence
factuallyincorrect;
7.2. That from the reading of Regulation 28(1), 29(1) and 29(2) of the Takeover Regulations, it is
clearthatasperregulation28(1)allthedisclosurestobemadeunderthechaptershallbeof
the aggregated shareholding and voting rights of the acquirer and every person acting in
concert with him. Thus, the aggregated shareholding of the acquirer and persons acting in
concert has to be disclosed at all points of time, as opposed to individual shareholding of the
acquireroreachofthepersonsactinginconcert;
7.3. That from the aforesaid it follows that for the purpose of determining 5% threshold limit as
stipulated under Regulation 29(1) or Regulation 29(2), the aggregated shareholding of the
acquirerandpersonsactinginconcerthastobereckonedandnottheirindividualshareholding
onstandalonebasis;
7.4. That thus under Regulation 29(1), disclosures are required to be made when the aggregate
holding of the acquirer along with the persons acting in concert (hereinafter referred to as
PACs)reaches5%ormoreinthetargetcompany;
7.5. That against the aforesaid backdrop, at all points of time they have been "persons acting in
concert"

with

following

persons/

entities

viz,

MrMananRajeshkumar

Patel,

MrsNirubenVitthalbhai Patel, Shankeswar Spinners Private Ltd, Yash/ Gajanand, Vastupal

Infrastructure Pvt. Limited, SatyaprabhuInfrastructre Pvt. Limited and the same has been
disclosedtotheCompanyaswellasstockexchangesinvariouspastdisclosuresunderTakeover
Regulationsregardingtheiracquisitionsinthecompanyfromtimetotime;
7.6. That since they along with PACs were already holding in aggregate over 5% shares in the
Company when additional shares were acquired on May 02, 2013/ April 30, 2013, as
applicable,the issue of making disclosures under Regulation 29(1) cannot and did not arise,
hence,theyhavenotviolatedtheprovisionsofRegulation29(1)asalleged.

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8. Consequent upon the hearing vide email/letters dated December 29, 2014, January 05, 2015 and
February13,2015,theNoticeeswererequestedtoprovidethedetailsofallsuchdisclosuresmade
to the stock exchanges as PACs prior to the acquisition of 21,00,000 shares by Gajanand and
50,00,490 shares by Yash, the datewise acquisitions of the PACs and the date as when a person
becameaPACwiththegroupinthematter.TheNoticeeswerefurthergivenanotheropportunityof
personalhearingonJanuary12,2015inthematter.

9. The ARsappeared for the personal hearing on behalf of the Noticees and submitted the
details/copiesofthedisclosuresassoughtvideletters/emailsdatedDecember29,2014,January05,
2015andFebruary13,2015.

CONSIDERATIONOFISSUES

10. I have carefully perused the written submission of the Noticees, the submissions put forth during
the hearing and the documents available on record. The issues that, therefore, arise for
considerationinthepresentcaseare:
10.1.

Whether the NoticeeGajanandviolated the provisions of Regulation 29(1) read with

29(3)oftheTakeoverRegulationsduringtheperiod2013?

10.2.

WhethertheNoticeeYashviolatedtheprovisionsofRegulation29(1)readwith29(3)ofthe
TakeoverRegulationsduringtheperiod2013?

10.3.

Doestheviolation,ifany,attractmonetarypenaltyunderSection15A(b)ofSEBIAct?

10.4.

Ifso,whatwouldbethemonetarypenaltythatcanbeimposedtakingintoconsideration
thefactorsmentionedinSection15JofSEBIAct?

FINDINGS

11. Before moving forward, it is pertinent to refer to the provisions of Regulation 29(1) read with
29(3)ofTakeoverRegulations,whichreadsasunder:

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CHAPTERV
DISCLOSURESOFSHAREHOLDINGANDCONTROL
Disclosurerelatedprovisions.
28.(1) The disclosures under this Chapter shall be of the aggregated shareholding and voting
rightsoftheacquirerorpromoterofthetargetcompanyoreverypersonactinginconcertwith
him.
(2)....
(3)....
(4)....
Disclosureofacquisitionanddisposal.
29. (1) Any acquirer who acquires shares or voting rights in a target company which taken
togetherwithsharesorvotingrights,ifany,heldbyhimandbypersonsactinginconcertwith
himinsuchtargetcompany,aggregatingtofivepercentormoreofthesharesofsuchtarget
company,shalldisclosetheiraggregateshareholdingandvotingrightsinsuchtargetcompanyin
suchformasmaybespecified.
(2).
(3)Thedisclosuresrequiredundersubregulation(1)andsubregulation(2)shallbemadewithin
twoworkingdaysofthereceiptofintimationofallotmentofshares,ortheacquisitionofshares
orvotingrightsinthetargetcompanyto,
(a)everystockexchangewherethesharesofthetargetcompanyarelisted;and
(b)thetargetcompanyatitsregisteredoffice.

12. Before examining the issues involved, I note that the Noticees have pointed outthat the date of
transaction mentioned in the respective SCN is incorrect. NoticeeYashpointed out that it had
entered the transaction stated in the SCN on May 02, 2013 on both exchanges BSE and NSE,
whereas, the date mentioned in the SCN is May 07, 2013. Similarly, NoticeeGajanandpointed out
thatithadenteredthetransactionmentionedintheSCNonApril30,2013onbothexchangesBSE
andNSE,whereas,thedatementionedintheSCNisMay04,2013.Insupportofthesame,boththe
Noticeessubmitted copies of the contract notes for the said transactions. On perusal of the said
contractnotecopies,IfindthattheNoticeeYashhadbought50,00,490sharesonMay02,2013and

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thattheNoticeeGajanandhadbought21,00,000sharesonApril30,2013.Inviewofthecopyofthe
contractnotesproducedbytheNoticees,Inotethatthedateoftransactionstandscorrectedinthe
matter.

13. Now the issue for consideration is whether the Noticeeswere required to make disclosures under
Regulation 29(1) read with 29(3) of the Takeover Regulations with respect to the said acquisition,
and if so, whether theyfailed to make the relevant disclosure. I note here that Regulation 28 (1)
incorporated under ChapterVof the Takeover Regulations,which deals with Disclosures of
Shareholding and Control, inter aliastates that the disclosures under this Chapter shall be of the
aggregated shareholding and voting rights of the acquirer or promoter of the target company or
every persons acting in concert with him. Thus, I note that the aggregated shareholding of the
acquirer and persons acting in concert have to be considered for the purpose of determining 5%
thresholdlimitstipulatedunderRegulation29(1)oftheTakeoverRegulations,andnottheindividual
shareholding of the acquirer or each of the persons acting in concert on standalone basis.Thus,
underRegulation29(1)oftheTakeoverRegulations,disclosuresarerequiredtobemadewhenthe
aggregateholdingoftheacquireralongwithPACsaggregatestofivepercentormoresharesinthe
targetcompany.

14. Further,InotefromthecopyofdisclosuresfiledwiththecompanyandtheExchangesdatedApril
23,2013byM/s.SatyaprabhuInfrastructurePvt.Ltd.,oneofthepersonsactinginconcertwiththe
Noticees,inrespectofaprioracquisitiondoneonApril22and23,2013bytheNoticeesalongwith
the PACs that the Noticees were acting in concert with Mr. MananRajeshkumar Patel, Ms.
NirubenVitthalbhaiPatel,M/s.ShankeshwarSpinnersPvt.Ltd.andM/s.VastupalInfrastructurePvt.
Ltd.Alsofromthesaiddisclosuremade,InotethattheNoticeesalongwithsaidPACswerealready
holding more than 5% in the company. Thus, I note that the Noticeesalong with the PACs were
alreadyholdinginaggregateover5%sharesintheCompany,whenadditionalshareswereacquired
onApril30,2013/May02,2013,asapplicable.Hence,IacceptthesubmissionoftheNoticeesthat
theissueofmakingdisclosuresunderRegulation29(1)readwith29(3)oftheTakeoverRegulations
did not arise. Consequently, I conclude that the Noticees have not violated the provisions of
Regulation29(1)readwith29(3)oftheTakeoverRegulationsasallegedpursuanttoacquisitionof
sharesunderconsideration.Thus,Iconcludethatitisanotafitcasetoimposemonetarypenalty

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under Section 15A(b) of the SEBI Act on the Noticees for the alleged violation of Regulation 29(1)
readwith29(3)oftheTakeoverRegulations.

ORDER

15. Aftertakingintoconsiderationallthefactsandcircumstancesofthecase,I,however,donotfind
the instant matter fit for imposition of penalty for violation under the Regulation 29(1) read with
29(3)oftheTakeoverRegulationasallegedagainsttheNoticeesviz.M/s.GajanandInfraconPrivate
Limited and M/s. Yash Infra Realty Private Limited.Hence the adjudication proceeding initiated
against the Noticees vide SCN Ref No. EAD6/AK/VRP/9189/2014 and EAD6/AK/VRP/9190/2014
datedMarch26,2014standsdisposedofinthematter.

16. In terms of rule 6 of the Rules, a copy of this order is being sent to the Noticees and also to the
SecuritiesandExchangeBoardofIndia.

Date:March29,2016
Place:Mumbai

AnitaKenkare
AdjudicatingOfficer

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