In the matter of Miven Machine tools Limited- minimum public shareholding requirement

WTM/PS/33/CFD/AUG/2015

SECURITIES AND EXCHANGE BOARD OF INDIA ORDER Under sections 11(1), 11(2)(j), 11(4) and 11B of the Securities and Exchange Board of India Act, 1992 read with section 12A of the Securities Contracts (Regulation) Act, 1956 in the matter of non-compliance with the requirement of minimum public shareholding by listed companies In respect of Miven Machine Tools Limited

1. Securities and Exchange Board of India (hereinafter referred to as "SEBI") had passed an interim Order dated June 04, 2013 (hereinafter referred to as "the interim order ") with respect to 105 listed companies who did not comply with the Minimum Public Shareholding ("MPS") norms as stipulated under rules 19(2)(b) and 19A of the Securities Contracts (Regulation) Rules, 1957 (hereinafter referred to as "SCRR") within the due date i.e., June 03, 2013. The interim order was passed without prejudice to the right of SEBI to take any other action, against the non-compliant companies, their promoters and/or directors or issuing such directions in accordance with law. The interim order was to be treated as a show cause notice by those companies for action contemplated in paragraph 18 thereof.

2. Miven Machine Tools Limited (hereinafter referred to as "the Company") is one such company against whom the interim order was passed. After considering the submissions made by the Company, SEBI, vide Order dated July 11, 2014, had issued the following directions, for the reasons stated therein: "....... 9. Accordingly, I, in exercise of the powers conferred upon me under section 19 of the Securities and Exchange Board of India Act, 1992 read with sections 11(1), 11(2)(j), 11(4) and 11B thereof and section 12A of the Securities Contracts (Regulation) Act, 1956, hereby issue the following directions : (i) The direction issued in paragraph 17(b) of the interim order dated June 04, 2013 stands modified to the extent that it shall not hinder the voluntary delisting process initiated by the Company/promoters and that its promoters shall be permitted to buy shares of the Company held by public shareholders in their offer for delisting. (ii)The Company shall endeavour to complete the delisting process on or before October 29, 2014 and shall report the outcome of the delisting process to SEBI within a period of two weeks thereafter.

(iii) The direction issued in paragraph 17(b) of the interim order dated June 04, 2013 shall be re-imposed immediately (without the need for passing of a separate order) in case the delisting process of the Company is not completed successfully within the period directed in sub-paragraph (ii) above. (iv)The directions contained in paragraphs 17(a), (c) and (d) of the interim order dated June 04, 2013 shall continue to be in effect till such time the Company is delisted from the stock exchanges or till the time the Company becomes compliant with the MPS norms, whichever is earlier.

10. This Order shall come into force with immediate effect.

11. The aforesaid directions are issued without prejudice to the right of SEBI to initiate action as contemplated in paragraph 18 of the interim order in case the delisting process of the Company is not successful within the period as directed above. .......... "

3. Thereafter, on consideration of the request made by the Company, vide letter dated October 28, 2014 and the oral submission made in the personal hearing held on February 11, 2015, SEBI passed an Order dated March 04, 2015 issuing the following directions: (i) “The direction issued in paragraph 17(b) of the interim order dated June 04, 2013 stands modified to the extent that it shall not hinder the voluntary delisting process initiated/to be initiated by the Company/promoters and that its promoters shall be permitted to buy shares of the Company held by public shareholders in their offer for delisting. (ii) The Company/its promoter are at liberty to approach its shareholders for seeking their consent with respect to the delisting proposal. (iii) The Company shall endeavour to complete the delisting process within a period of four (4) months and shall report the outcome of the delisting process to SEBI within a period of two weeks thereafter. (iv) The direction issued in paragraph 17(b) of the interim order dated June 04, 2013 shall be re-imposed immediately (without the need for passing of a separate order) in case the delisting process of the Company is not completed successfully within the period directed in sub-paragraph (iii) above. (v) The directions contained in paragraphs 17(a), (c) and (d) of the interim order dated June 04, 2013 shall continue to be in effect till such time the Company is delisted from the stock exchanges or till the time the Company becomes compliant with the MPS norms, whichever is earlier. “

4. The Company vide letter dated June 25, 2015, inter alia submitted that its Board of Directors had, upon receiving the offer from the promoters, approved the delisting offer in their meeting held on March 08, 2015. However, while undertaking the process of issuing the notice of postal ballot to its shareholders, amendments were made to the SEBI (Delisting of Equity Shares) Regulations, 2009 (“the Delisting Regulations”) vide notification dated March 24, 2015. The Company submitted that it qualified as a “small company” under the amended Chapter VII of the Delisting Regulations and therefore its promoters initiated the process again under the revised regulations. The Company also submitted that BSE, vide its letter dated June 23, 2015, had granted in-principle approval for the voluntary delisting programme of the Company. The Company further submitted that it expects to complete the delisting process by September 25, 2015 and requested SEBI to grant extension of time for completion of all the formalities related to its delisting process by atleast 3 months in terms of regulation 25A of the Delisting Regulations. This request for extension of time was also reiterated by the Company vide its letter dated July 03, 2015.

5. I have considered the request made by the Company for extension of time for completing the formalities associated with its delisting process. I note that SEBI vide its Order dated March 04, 2015 inter alia directed that the Company shall endeavour to complete the delisting process within a period of 4 months from the date of such Order. The Company submitted that its Board of Directors, in their meeting held on March 08, 2015, approved the offer for voluntary delisting from its promoters and decided to seek approval of shareholders for such proposal. However, the Delisting Regulations were amended with effect from March 24, 2015, wherein the amended regulation 27(1) {Special provisions in case of small companies} provided that equity shares of a small company may be delisted from all recognised stock exchanges where they are listed without following the procedure in Chapter IV provided certain conditions as specified therein are satisfied. The Company stated that as per the amended provisions, it qualified as a ‘small company’ and therefore had to restart the process under the amended regulations.

6. I note that pursuant to the receipt of the proposal from promoters vide letter dated April 06, 2015 under the revised criteria pursuant to the amendment of the Delisting Regulations, the Company re-commenced the process for voluntary delisting. A merchant banker had been appointed and a due diligence certificate had been issued. The Scrutinizer’s Report with respect to the Postal ballot and e-voting confirmed that special resolution was passed as required under regulation 8(1)(b) and also that the number of votes cast by the public shareholders was more than two time the number of votes against the proposal. I also note that BSE vide letter dated June 23, 2015 has granted in-principle approval for voluntary delisting of equity shares of the Company subject to compliance with the procedure prescribed under the Delisting Regulations. I also note that the promoters have fixed the exit price at Rs.10/- which is stated to be higher that the Merchant Banker recommended floor price of Rs.4.39/- per share.

7. Considering the factors such as the amendments to the Delisting Regulations that happened post the SEBI Order dated March 04, 2015, the Company/its promoters re-commencing the voluntary delisting process post the amendment of the Delisting Regulations and the in-principle approval granted by BSE on June 23, 2015 for the proposed voluntary delisting of equity shares by the Company, the process of delisting is underway and the last date for receipt of consent forms is fixed for July 30, 2015, I am of the considered view that extension of time of three months from July 03, 2015 (the due date as per SEBI Order dated March 04, 2015), as requested by the Company vide letters dated July 03, 2015 and June 25, 2015, be allowed in the interest of the public shareholders of the Company.

8. Accordingly, I, in exercise of the powers conferred upon me under section 19 of the Securities and Exchange Board of India Act, 1992 read with sections 11(1), 11(2)(j), 11(4) and 11B thereof and section 12A of the Securities Contracts (Regulation) Act, 1956, hereby issue the following directions :

(i) The direction issued in paragraph 17(b) of the interim order dated June 04, 2013 stands modified to the extent that it shall not hinder the voluntary delisting process initiated by the Company/promoters and that its promoters shall be permitted to buy shares of the Company held by public shareholders in their offer for delisting.

(ii) The Company shall endeavour to complete the delisting process on or before October 02, 2015 (i.e. three months from July 03, 2015 – the date when delisting was supposed to have been completed in terms of SEBI Order dated March 04, 2015) and shall report the outcome of the delisting process to SEBI within a period of two weeks thereafter.

(iii) The direction issued in paragraph 17(b) of the interim order dated June 04, 2013 shall be re-imposed immediately (without the need for passing of a separate order) in case the delisting process of the Company is not completed successfully within the period directed in sub-paragraph (ii) above.

(iv) The directions contained in paragraphs 17(a), (c) and (d) of the interim order dated June 04, 2013 shall continue to be in effect till such time the Company is delisted from the stock exchanges or till the time the Company becomes compliant with the MPS norms, whichever is earlier.

9. This Order shall come into force with immediate effect.

10. The aforesaid directions are issued without prejudice to the right of SEBI to initiate action as contemplated in paragraph 18 of the interim order in case the delisting process of the Company is not successful within the period as directed above.

11. Copy of this Order shall be served on the stock exchanges and depositories for their information and necessary action.

PRASHANT SARAN WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA

Date : August 04, 2015 Place : Mumbai