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BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA
[ADJUDICATION ORDER NO. CFD/APIL/AO/DRK-AKS/EAD3-643-660/189-206 -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
(Acquirer and PAC)

Ms. Ram Piari
(Acquirer and PAC)
Ms. Pushpa Rani
(Acquirer and PAC)
Ms. Raman Pal
(Acquirer and PAC)
Ms. Rohini S.
Ahluwalia (PAC)
Ms.Rohini Ahluwalia
(PAC)
Ahluwalia Builders &
Development Group
(Private Limited)
(PAC)
Capricon Industrials
Ltd. (PAC)
Tidal Securities Pvt.
Ltd. (PAC)
Mr. Shobhit Uppal
(PAC)
Mr. Vikas Ahluwalia
(PAC)
Ms. Rachna Uppal
(PAC)
Ms. Sudarshan
Walia
(PAC)
Ms. Sudarshan
Ahluwalia
(PAC)
Ms. Mukta Ahluwalia
(PAC)
Mr. Madan Gopal
(PAC)
Mr. Raj Kumar
Ahluwalia
(PAC)
Mr. Santosh Ahluwalia
(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).
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 (2) read with 14 (1) alleged to have been
committed by Mr. Bikramjit Ahluwalia, Ms. Ram Piari, Ms. Pushpa Rani, Ms. Raman
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Pal (Acquirer and PAC), Ms. Rohini S. Ahluwalia, Ms. Rohini Ahluwalia, Ahluwalia
Builders & Development Group (Private) Limited, Capricon Industrials Ltd., Tidal
Securities Pvt. Ltd., Mr. Shobhit Uppal, Mr. Vikas Ahluwalia, Ms. Rachna Uppal, Ms.
Sudarshan Walia, Ms. Sudarshan Ahluwalia, Ms. Mukta Ahluwalia, Mr. Madan Gopal,
Mr. Santosh Ahluwalia and Mr. Raj Kumar Ahluwalia (PAC) (hereinafter referred to as
'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/18334/2014 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.
4. In the said SCN, it was alleged that the Promoters had acquired 5.38% shares during
the year 2009-10 which led to the violation of Regulations 11 (2) read with 14 (1) of the
Takeover Regulations.

5. Noticees vide their email dated 30.07.2014 and letter dated 11.08.2014 submitted a
common reply to the SCN as follows:
Noticees state that the following acquisitions were made in the month of March,
2010:

(i) Mr. Bikramjit Ahluwalia purchased 48,810 equity shares of the Company
(Equity Share(s)) aggregating to of 0.68% of the then share capital of the
Company at ` 51.02 per share between 22.03.10 to 25.03.10.

(ii) Ms. Pushpa Rani purchased 2,23,774 equity shares aggregating to 3.11% of the
then share capital of the Company (2,23,221 shares at ` 50.35 and 553 shares
at ` 52 per share) between 04-03-2010 to 23-03-2010.

(iii) Ms. Ram Piari purchased 61,566 equity shares aggregating to 0.86% of the then
share capital of the Company at ` 51.50 each share between 22-03-2010 & 23-
03-2010. Mrs. Ram Piari, out of the said 61,566 equity shares, sold 30,000
equity shares aggregating to 0.42% in open market at ` 50.77 each on
23.04.2010. The average purchase price at which Ms. Ram Piari purchased the
aforementioned equity shares was ` 51.50 per share during the March 2010 (i.e.
` 49 to ` 52 per share). Hence, there was no profit made by sale of shares by
Mrs. Ram Piari.

(iv) Ms. Raman Pal purchased 21,116 equity shares aggregating to 0.29% of the
then share capital of the Company at ` 51.50 each share on 04-03-2010.

(v) Tidal securities acquired 31,882 equity shares aggregating to 0.44% of the then
share capital of the Company at ` 51.50 each share between 22-03-2010 to 25-
03-2010.

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In light of the aforesaid acquisition the total acquisition by the Promoter and
Promoter Group of the Company together with persons acting in concert with them
was 3,87,147 equity shares aggregating to 5.38% of the then share capital of the
Company of which 0.42% was sold on 23.04.2010 as stated above.

Further, please note that the acquisition of 0.55% of the total of 0.68% of the then
share capital of the Company purchased by Mr. Bikramjit Ahluwalia was made by
way of an open market purchase and therefore exempted under second proviso to
regulation 11(2) of the Takeover Regulations. Relevant filing in this regard under
Regulation 7(3) of the Takeover Regulation have been made by Mr. Bikramjit
Ahluwalia and Company, as the case maybe.

Noticees humbly submit that at the time of the impugned acquisition, Mr. Bikramjit
Ahluwalia (part of the then promoters group of the Company) and Ms. Ram Piari,
Ms. Pushpa Rani, Ms. Raman Pal and Tidal Securities Pvt. Ltd. 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 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. 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.
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;
a) At the outset Mr. Bikramjit Ahluwalia, Ms. Ram Piari, Ms. Pushpa Rani, Ms.
Raman Pal and Tidal Securities Pvt. Ltd. (herein after referred to as 'Acquirer-
Noticees') submit that the impugned acquisition was done by Acquirer-Noticees
on their own separately, without knowledge to each other about their respective
acquisition at the relevant time.

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b) Acquirer- Noticees submit that the other noticees who are deemed as persons
acting in concert as per the extant Regulations had no role to play at all in the
acquisition. They were passive persons in the acquisition and the notices were
issued to them on technical reasons.

c) Acquirer- Noticees submit that they were separately holding following shares on
31
st
December, 2009. This constituted 35.38% of the total issued capital of APIL.
The details are as under:
Name Holding as on 31
st

December, 2009
% of Holding as on 31
st

December, 2009
Mr. Bikramjit Ahluwalia, 25,47,502 35.38
(the Noticee No. 1)
Ms. Ram Piari, (the
Noticee No.2)
NIL NIL
Ms.Pushpa Rani, (the
Noticee No. 3)
NIL NIL
Ms. Raman Pal, (the
Noticee No. 4)
NIL NIL
Total : 25,47,502 35.38

d) The total holding of all the persons acting in concert as stated in the notice as on
31
st
December 2009 was 44,37,940 shares constituting 61.64% of the paid up
capital of APIL.

e) Acquirer- Noticees submit that during the period 22 March 2010 to 25 March
2010, the Acquirer - Noticees 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 of Acquirer Date of
Acquisition
No. Of shares
acquired
% of Acquisition
Mr. Bikramjit
Ahluwalia,
23-03-2010 48,810 0.68%
Ms. Ram Piari, 23-03-2010 61,566 0.86%
Ms. Pushpa Rani,
04-03-2010
23-03-2010

Total:
80,874
1,42,900

2,23,774



3.11%
Ms. Raman Pal 04-03-2010 21,116 0.29%
M/s Tidal Securities 04-03-2010 31,882 0.44%
Total 3,87,148 5.38%

f) Acquirer- Noticees submit that with the above acquisition, their shareholding had
become 66.57% and that the above acquisitions were done with a sole view to
consolidate their individual holdings in the APIL. Though technically, they are all
persons acting in concert, they never acted in concert to acquire the shares and
there was no meeting of minds to acquire the said shares as stated in the table
above.

g) Acquirer- Noticees further submit that all these acquisitions were from the open
market in normal segment on the stock exchange and not through any buck deal
or block deal or negotiated deal or preferential allotment.

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h) Acquirer- Noticees submit that one of the acquirer's Ms. Ram Piari realized that
there was an acquisition in excess of 5% to the extent of 0.38% when all the
acquisitions put together in year-end reconciliation. Mrs. Ram Piari, out of the said
61,566 equity shares, sold 30,000 equity shares aggregating to 0.42% in open
market at ` 50.77 each on 23.04.2010. The average purchase price at which Ms.
Ram Piari purchased the aforementioned equity shares was ` 51.50 per share
during March 2010 (i.e. ` 49 to ` 52 per share). Hence, there was no profit made
by sale of shares by Ms. Ram Piari. Therefore, the said Acquirer sold and thereby
rolled back 30,000 shares consisting of 0.42% on 22
nd
April, 2010. With this sale
of share by Ms. Ram Piari, the total acquisition during the relevant period had
come down to 4.96%.

i) As soon as the acquisition was done, Acquirer- Noticees had independently
complied with the reporting requirement under Regulations 7(1), 7 (1A) of the
SAST Regulation, 1997. The Company had also complied in Regulation 7(3) of
the said Regulation with in stipulated time.

j) Acquirer- Noticees submit that they had acquired the said shares in the open
market in the normal segment of the stock exchange where the shares of APIL
are listed. Post acquisition shareholding together with persons acting in concert,
after the roll back was 66.15% which was within 5% creeping acquisition limit
prescribed in the Regulations and within seventy five per cent (75%) threshold
limit mentioned in the said Regulation.

k) In view of the specific language of second proviso to Regulation 11(2), Acquirer-
Noticees respectfully submit that their acquisition is exempted from making any
public announcement.

l) Acquirer- Noticees respectfully submit that by this acquisition of additional 4.96%
they had not crossed the threshold limit of 5 % stipulated in the said second
proviso.

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 and
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 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.

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.
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11. Acquire-Noticees have admitted that during March 2010 they had acquired 5.38%
shares. Thus, the aforesaid acquisition of shares is not in dispute.
12. Regulation 11 of the Takeover Regulations makes provision for public announcement in
case of consolidation of holdings. A bare reading of Regulation 11 (2) of the Takeover
Regulations makes it clear that any acquirer who has 55% but less than 75% of the
shares or voting rights in a company acquires any additional share or voting right in the
company 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. However, the second proviso to Regulation 11 (2) makes an exception
to the said Regulation. It states that an acquirer can acquire upto 5% additional shares
or voting rights subject to that the said acquisition is made through open market
purchase in normal segment on the stock exchange and the post acquisition
shareholding of the acquirer together with persons acting in concert with him does not
increase beyond 75%.

13. In the present matter it is observed from the material made available on record that
Promoter group's shareholding on 01.01.2009 had increased from 61.12% to 61.19%
i.e., an increase of 0.07%. Thereafter the Promoter group / Acquirer- Noticees acquired
further 5.38% shares during March 2010. Thus, the Promoter group in the month of
March 2010 crossed the limit of 5% by 0.45%. Hence, 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. Noticees at para 8 (h) at page 5 have submitted that Ms.
Ram Piari, Acquirer and PAC had rolled back 30,000 shares consisting of 0.42% on
22
nd
April, 2010 after they realized that there was an acquisition in excess of 5% to the
extent of 0.38% when all the acquisitions put together.
14. The noticees / ARs have 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 said understanding is not acceptable in view of the fact that SEBI vide
its Circular dated 06.08.2009 had clarified the interpretation of the second proviso. The
Circular at paras 3 (b), (c) and (d) states as follows;
" b. The acquirer together with persons acting in concert with him, holding shares or
voting rights as specified at (a) above, may acquire additional shares or voting rights
upto a maximum of five per cent (5 %) voting rights in the target company in one or
more tranches, without any restriction on the time-frame within which the same can be
acquired;
c. The aforesaid acquisition of five per cent (5 %) shall be calculated by aggregating all
purchases, without netting the sales."
d. Consequent to such acquisition, the percentage of shareholding / voting rights of the
acquirer, together with persons acting in concert with him, in the target company, shall
not increase beyond seventy five per cent (75 %). This limit is applicable irrespective of
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the level of minimum public shareholding required to be maintained by the target
company in terms of clause 40A of the Listing Agreement.

15. From the above it is clear that the acquisition of 5% shares in multiple tranches or at
once can be done only till the time the limit of 5% is reached without making a public
announcement from the open market. In other words the moment 5% shares or voting
rights are acquired by an acquirer whose shares or voting rights in the target company
is between 55% to 75%, any additional shares or voting rights can be acquired only
after making a public announcement. As discussed above the Promoter group during
the period January 2009 to March 2010 had acquired 5.45% shares in the target
company. Thus, they had crossed the permissible limit of 5% and had to make a public
announcement to acquire any additional share in terms of Regulation 11 (2) of
Takeover Regulations which they had failed to do.
16. Though the noticees have submitted that Ms. Ram Piari had sold 30,000 equity shares
aggregating to 0.42% in open market on 23.04.2010, it may be added that the moment
they had crossed the limit of 5% shares they had to make the public announcement in
accordance with Regulation 11 (2) of Takeover Regulations. The statutory obligation
cannot be done away with by selling the excess additional shares. Also as stated at
para (3) (c) of SEBI Circular dated 06.08.2009, ".. acquisition of five per cent (5 %)
shall be calculated by aggregating all purchases, without netting the sales ". It is also
noted that Promoter group / Acquirer- Noticees acquisition of 5.38% shares came after
SEBI's clarification issued vide its Circular dated 06.08.2009.
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, conclusions and Order of Hon'ble Supreme Court of
India, it can be concluded that the noticees have failed to comply with Regulations 11
(2) read with 14 (1) of the Takeover Regulations for the aforesaid transaction. The text
of the said provisions are as follows:
SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997

Consolidation of holdings

...
11. (2) An acquirer, who together with persons acting in concert with him has acquired, in
accordance with the provisions of law, fifty five per cent (55%) or more but less than seventy
five per cent (75%) of the shares or voting rights in a target company, may acquire either by
himself or through persons acting in concert with him any additional share or voting right,
only if he makes a public announcement to acquire shares or voting rights in accordance
with these 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
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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.

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 noticee namely Mr. Madan Gopal has
expired and therefore the current proceedings against him 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 ` 20,00,000/- (Rupees
Twenty 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 ` 20,00,000/- (Rupees Twenty Lakh only) jointly and
severally on all the rest of the noticees viz Mr. Bikramjit Ahluwalia, Ms. Ram Piari, Ms.
Pushpa Rani, Ms. Raman Pal, Ms. Rohini S. Ahluwalia, Ms. Rohini Ahluwalia, Ahluwalia
Builders & Development Group (Private) Limited, Capricon Industrials Ltd., Tidal
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Securities Pvt. Ltd., Mr. Shobhit Uppal, Mr. Vikas Ahluwalia, Ms. Rachna Uppal, Ms.
Sudarshan Walia, Ms. Sudarshan Ahluwalia, Ms. Mukta Ahluwalia, Mr. Santosh
Ahluwalia and Mr. Raj Kumar Ahluwalia in terms of the provisions of Section 15H (ii) of
the Securities and Exchange Board of India Act 1992 for the violation of Regulations 11
(2) read with 14 (1) of SEBI (Substantial Acquisition of Shares and Takeovers)
Regulations, 1997. In the facts and circumstances of the case, I am of the view that the
said penalty is commensurate with the default committed by all the noticees.

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: 01.10.2014 ADJUDICATING OFFICER

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