SEBI disposes of case against PAL in alleged acquisition of PAL-Peugeot shares
14 Oct 2010
The Securities and Exchange Board of India (SEBI) on Tuesday passed an order disposing of the show-cause notice issued to Premier Automobiles Ltd (PAL) for violation of the takeover regulations in the alleged transfer of shares of its joint venture partner Automobile Peugeot of France to itself.
It was alleged that PAL had transferred 8,40,25,000 shares (31.96 per cent) equity stake of Automobile Peugeot in PAL-Peugeot Ltd to itself after the French company gifted its stake to the partner and quit the JV.
Both PAL and Peugeot held an equal stake of 8,40,25,000 shares (31.96 per cent) in the JV. Public, banks and institutions held the remaining 9,48,82,066 (36.08 per cent) equity in the joint venture.
SEBI disposed of the show-cause notice without any directions to PAL as it could not find any violation of the regulations.
SEBI had, on 5 February 2010, served a show-cause notice on PAL, the remaining shareholder in PAL-Peugeot Ltd, as the French company had left the joint venture after gifting its 31.96 per cent stake to the remaining partner.
The transfer of shares, according to the SEBI show-cause notice, was done without an affirmative vote of at least one of the directors designated by the transferor company and without the approval of the shareholders.