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Birla Mutual penalized for non-compliance
Kolkata:
The Securities and Exchange Board of India has penalised the Birla Mutual Fund for a sum of Rs75,000, for failing to comply with key provisions of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

The Birla MF was found to have acquired over 2.5 lakh shares of Subex Systems Ltd (SSL) in 1999 under various schemes, constituting 7.06 per cent of the SSL's paid-up capital. This entitled it to exercise more than 5 per cent of the voting rights of the company, an order passed by SEBI says. The acquirer failed to make the necessary disclosures to SSL about the acquisition, within the period prescribed under Regulation 7(1) and (2) of the takeover norms.

Adjudication proceedings were initiated against Birla MF by the regulator and a show-cause notice was issued.

Birla MF pointed out that, as per the half-yearly audited report for September 30, 1999, the share capital of SSL appearing in the balance sheet was Rs31,92,1000 and hence 5 per cent of the share capital amounted to Rs15,96,050. None of the schemes crossed the 5-per cent limit as on that date.

Subsequently, SSL made a preferential allotment of 3,30,800 shares, in which Birla Advantage Fund was allotted 30,000 shares. As a result, the scheme crossed the limit. Hence, exceeding the limit was not due to fresh purchase but a consequence of the preferential allotment done by SSL.

But at a hearing earlier this month Birla MF officials deviated from their earlier stand and admitted they had not complied with Regulation 7(1) and (2).
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SPL Industries files for IPO of Rs.60 crore
Mumbai:
SPL Industries, a Delhi-based knitwear and garment manufacturer, plans to make a public offer for Rs60 crore in order to fund capacity expansion and has filed a red herring prospectus with SEBI for this purpose.

The company is expecting to part-finance its expansion with a public issue of 90 lakh equity shares of Rs10 each for cash at a premium through the 100 per cent book-built route. Of the issue size, about Rs35 crore will go towards expansion and the rest towards working capital expenses.

The total expansion cost is Rs41.83 crore. IDBI has sanctioned a term loan of Rs10 crore under the TUF scheme, of which Rs5 crore has been disbursed. The company has placed orders for machinery worth Rs20 crore.

Post-IPO, the promoter shareholding would be diluted by 31.03 per cent. Its book running lead manager for the issue is Karvy Investor Services and co-book running lead manager is UTI Securities.

SPL also plans to add a new plant each for a yarn dyeing and the production of woven garments. The company is ramping up capacities because existing clients, such as GAP and JC Penney, have increased the quantum of orders. Other buyers have also asked the company to execute more orders.
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domain-B : Indian business : News Review : 04 May 2005 : markets