Description

SEBI order addressing violations of substantial acquisition and takeover regulations by promoter group members of Patels Airtemp India Limited.

Summary

SEBI has issued an order in the matter of Patels Airtemp (India) Limited following a show cause notice dated October 21, 2024. The order addresses violations of substantial acquisition and takeover regulations by nine entities including promoter group members who acquired controlling stake in Therm Flow Engineers Private Limited (TFEPL), which held 26.91% shares in the target company.

Key Points

  • Nine entities including Sanjiv Narayanbhai Patel, Prakash N Patel HUF, and others were issued show cause notices
  • Violations relate to Sections 11, 11(4A), 11B(1) and 11B(2) read with Section 15H and 15HB of SEBI Act, 1992
  • Also covers Regulation 32 of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011
  • Promoter group increased shareholding in TFEPL from 50% to 66.67% during FY 2017-2018
  • TFEPL held 26.91% shares of Patels Airtemp as of June 2017 quarter

Regulatory Changes

No new regulatory changes introduced. This is an enforcement action under existing substantial acquisition and takeover regulations.

Compliance Requirements

  • Adherence to disclosure requirements under substantial acquisition regulations
  • Proper compliance with takeover code provisions when acquiring controlling stakes
  • Timely notifications for changes in shareholding patterns affecting listed companies

Important Dates

  • Show Cause Notice: October 21, 2024
  • NCLT Order (background): March 15, 2017
  • Share transfer in TFEPL: September 01, 2018
  • Order reference: QJA/SS/CFD/CFD-SEC-4/31576/2025-26

Impact Assessment

The order reinforces SEBI’s commitment to enforcing substantial acquisition and takeover regulations. It highlights the importance of proper disclosure and compliance when promoter groups acquire controlling stakes in entities that hold significant shareholdings in listed companies. The case demonstrates regulatory scrutiny of indirect acquisition structures and their impact on listed company governance.

Impact Justification

Enforcement action against promoter group for regulatory violations with potential implications for corporate governance