BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI

                      Appeal No. 172 of 2012 

                              Date of decision: 07.09.2012 

Mr. Bhavook Tripathi
Shree Goverdhan Nath Housing Society,
North Main Road,
Lane B, Koregaon Park,
Pune 411 001.

             ……Appellant 

Versus
Securities and Exchange Board of India
SEBI Bhavan, Plot No. C-4A, G Block,
Bandra Kurla Complex, Bandra (East),
Mumbai – 400 051.

…… Respondent
Mr. R. S. Loona, Advocate with Mr. Abhi shek Borgikar, Ms. Abhaya Gurumurthy,
Advocates for the Appellant.
Mr. Shiraz Rustomjee, Senior Advocate w ith Ms. Amrita Joshi, Advocate for the
Respondent.
CORAM : P. K. Malhotra, Member & Presiding Officer ( Offg .)
S. S. N. Moorthy, Member

Per : P. K. Malhotra (Oral)
The appellant before us filed a draft letter of offer with the Securities and
Exchange Board of India (the Board) fo r acquisition of 30,45,242 shares of M/s. R.
Systems International Limited (target company) at a price of ` 150.05/- per share in
terms of the Securities and Exchange Bo ard of India (Substantial Acquisition of
Shares and Takeovers) Regulations, 1997 (for short the takeover code).

2. The Board conveyed its comments on the draft letter of offer in terms of
   Regulation 16(4) of the take over code. One of the observations made by the Board
   was that prima-facie there exist a pre-understanding/agreement between the seller and
   the acquirer to sell the shares to the acqui rer on the date of public announcement and
   one of the investors namely Manmohan Passi had given a declaration that he had a
   pre-understanding with the acquire r for selling the shares to the appellant. As per
   Regulation 22(2) of the takeover code, th e acquirer is required to complete the 2
   acquisition of shares or voting rights subj ect to the acquirer depositing cash in the
   escrow account equal to 100 per cent of the consideration payable under the open
   offer. As the appellant failed to put 100 per cent cash in th e escrow account, a
   direction has been given by the Board in the impugned letter to ensure compliance
   with the requirements of Regulation 22(2) of the takeover code.
3. The grievance of the appellant is that it has been directed to comply with this
   requirement on the basis of the some d eclaration filed by Manmohan Passi about
   which the appellant has no knowledge. The Board has not sought any comments
   from the appellant on this declaration befo re giving a direction to put 100 per cent
   cash in escrow account as per the requireme nt of Regulation 22(2) of the takeover
   code.
4. During the course of hearing learned senior counsel for the Board was fair
   enough to state, on instructions, that the Bo ard is willing to make available a copy of
   the declaration and other material, if any, on the basis of which observations in para 3
   of Annexure I to the impugned letter dated July 25, 2012 have been made.
5. The appeal is disposed of with a dir ection to make available the declaration
   and other material to the appellant on the basis of which the observations/comments
   in para 3 of Annexure I to the letter dated July 25, 2012 were issued by the Board
   within a period of two week s from today. The appellant may respond thereto within
   three weeks thereafter. The Board may issue its comments/observations after
   considering the reply received from the appellant.

No costs.
Sd/-
P. K. Malhotra
Member &
Presiding Officer ( Offg .)

Sd/-
S. S. N. Moorthy
Member
07.09.2012
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