Order against Satra Properties(India) Ltd

1. Satra Properties (India) Limited (hereinafter referred to as the target company) is a company incorporated under the Companies Act, 1956, having its Registered Office at Dev Plaza, 2nd Floor, Opp. Andheri Fire Station, S.V. Road, Andheri (West), Mumbai- 400058. The equity shares of the target company are listed on the Bombay Stock Exchange Limited. Mr. Praful N. Satra and Mrs. Minaxi P. Satra (hereinafter referred to as the acquirers/promoters), vide letter dated May 6, 2010 read with a subsequent letter dated June 22, 2010, filed an application with the Securities and Exchange Board of India (hereinafter referred to as SEBI) under Regulation 4 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (hereinafter referred to as the Takeover Regulations) in respect of their proposed acquisition of 1,63,74,568 shares of the target company from Sicom Investments & Finance Limited (hereinafter referred to as SIFL). It is stated in the application that the acquirers belong to the promoter group of the target company and hold 9,63,71,831 equity shares constituting 62.03% of the total share capital of the target company.

As per the application, the target company had availed a loan of `60,00,00,000 from SIFL and the acquirers had pledged an aggregate of 3,90,00,000 equity shares of the target company as additional security towards the said loan. It was further stated that due to recession in the economy faced by the real estate industry in that particular period, the target company could not repay the loan in time. As a result, SIFL had invoked the pledge on 50,00,000 shares of Mrs. Minaxi P. Satra and 1,75,00,000 shares of Mr. Praful N. Satra and transferred the same in its name. As per the application, out of the 2,25,00,000 shares invoked by SIFL, 61,25,432 shares were sold till June 19, 2010 and the remaining 1,63,74,568 shares are still with SIFL. It is stated that the target company had now settled the dues with SIFL and that the acquirers wish to acquire the remaining shares from SIFL. Under the circumstances, SIFL had agreed to return (transfer) the remaining unsold shares i.e., 1,63,74,568 shares held by it to the promoters/acquirers. According to the acquirers, the aforesaid proposed acquisition would increase the voting rights of the promoter group (including the acquirers) from 62.80% to 73.34% and therefore would trigger Regulation 11(2) of the Takeover Regulations.

Hence, the application is filed by the acquirers seeking exemption from the applicability of the said Regulation inter alia on the following grounds:

i. The proposed acquisition is not for acquisition of control of the target company. ii. The proposed acquisition is with reference to acquiring back the invoked but unsold shares of the acquirers held by SIFL. iii. Even after the aforesaid acquisition of equity shares, the public shareholding shall continue to be more than 25% as stipulated by the Listing Agreement. iv. The proposed acquisition of shares would not result in change in control as the acquirers belongs to the promoter group of the target company and are already in control over the target company.

2. The shareholding pattern of the target company (before and after the proposed acquisition) as per the aforesaid application is as under:-

Shareholders’ Number of Before the proposed After the proposed acquisition Category registered acquisition shareholders as on date of application Number of % of Number of % of shares/total shares/voting shares/total shares/voting voting capital rights held voting rights held held capital held Promoter Group 6 Mr. Praful 39.30% Mr.Praful 47.50% (including the acquirers) Satra: Satra: 6,10,62,331 7,37,98,106 Mrs. Minaxi 22.73% Mrs. Minaxi 25.07% Satra: Satra: 3,53,09,500 3,89,48,293 Total in 62.03% 72.57% respect of the acquirers Jitendra K. 0.77% Jitendra K. 0.77% Shah (HUF): Shah (HUF): 12,00,000 12,00,000 Total in 62.80% 73.34% respect of the promoter group FIs/Banks 1 100 0 Not applicable- Since the proposed acquisition is with reference to acquiring back of promoters shares only held by SIFL. Also, the changes, in these categories, if any, would not be on account of any acquisition. Also the public shareholding shall continue to be more than 25% FIIs/NRIs/OCBs 43 6,96,424 0.45 Public 5622 5,70,89,645 36.75 Total 5672 15,53,58,000 100% 15,53,58,000 100%

3. Thereafter, the acquirers filed information/documents to SEBI, vide various letters dated July 19, 2010, August 18, 2010, September 17, 2010 and September 24, 2010 and electronic mails dated September 17, 2010 and August 10, 2010. The aforesaid application dated June 22, 2010 was forwarded to the Takeover Panel, by SEBI, in terms of Regulation 4(4) of the Takeover Regulations and the Takeover Panel, vide report dated October 30, 2010 has recommended as under:

“Panel observed that the promoters have not sold or purchased any shares from the date of pledging shares with SIFL. Further, the public shareholding shall remain above 25% even after acquisition of the aforesaid pledged shares by the promoters from SIFL. Since the transaction is merely a return of the shares which were pledged by the promoters as additional security to the loan of SIFL, the panel did not find any objection to the grant of exemption to the proposed acquisition of shares by the promoters. Panel therefore, recommended exemption to the acquirers from complying with regulation 11(2) of the SAST Regulations.”

4. I have considered the application dated June 22, 2010, the recommendation of the Takeover Panel, and other relevant material available on record. In terms of the application, the promoters of the target company had pledged an aggregate of 3,90,00,000 equity shares of the target company as additional security with SIFL against its loan of `60,00,00,000. It is stated in the application that as the target company could not repay the loan in time, SIFL had invoked the pledge on 50,00,000 shares of Mrs. Minaxi P. Satra and 1,75,00,000 shares of Mr. Praful N. Satra and transferred the same in its name. SIFL, after transferring the said shares, also started selling the shares in the market. Out of the 2,25,00,000 shares invoked by SIFL, 61,25,432 shares were sold till June 19, 2010. I note from the application that the target company has settled the dues with SIFL. In this regard, the acquirers have also forwarded a copy of the letter of SIFL dated May 14, 2010, addressed to the target company. It was stated in the said letter that it SIFL had received the entire dues in respect of the short term loan of `60,00,00,000, on May 12, 2010 and there are no dues recoverable or to be recovered from the target company against the aforesaid loan. Under the circumstances, SIFL has agreed to return (transfer) the remaining invoked but unsold 1,63,74,568 shares held by it to the acquirers. In this regard, the acquirers have also forwarded a copy of the certificate dated September 17, 2010 received from SIFL wherein it was certified:

“ This is to confirm that we are holding 1,63,74,568 equity shares of Satra Properties (India) Ltd. belonging to the promoters of the company i.e. 1,27,35,775 equity shares of Shri. Praful Satra & 36,38,793 equity shares of Smt. Minaxi Satra.

The said equity shares were pledged by the promoters of the company as a part of the security towards loan taken by Satra Properties (India) Ltd., which is duly repaid.

We have no objection in transferring the invoked but unsold 1,63,74,568 equity shares back to the promoters on receipt of their written request.”

5. I further note that pursuant to the return of shares, the shareholding/voting rights of the promoter group (including the acquirers) would increase from 62.80% to 73.34%. I also note that there would not be any change in control over the target company pursuant to such increase, as the acquirers belong to the promoter group which is already in control. Even after the proposed acquisition, the public shareholding in the target company would remain above 25%, the level required for continuous listing in terms of the Listing Agreement. Having considered the application, I agree with the recommendations of the Takeover Panel and consider the present case a fit one for granting exemption from the applicability of Regulation 11(2) of the Takeover Regulations.

6. In view of the foregoing I, in exercise of the powers conferred upon me under Section 19 of the Securities and Exchange Board of India Act, 1992 read with Regulation 4(6) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, hereby grant exemption to the acquirers, namely Mr. Praful N. Satra and Mrs. Minaxi P. Satra, from complying with the requirements of Regulation 11(2) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 in respect of their proposed acquisition of 1,63,74,568 shares of the target company, Satra Properties (India) Limited, through the release of shares pledged with Sicom Investments & Finance Limited.

7. The exemption is granted subject to the following conditions:

a. The statements/averments made/facts or figures given in the application are true and correct to the best knowledge of the acquirers.

b. The acquirers along with others in promoter group shall ensure compliance with the statements, disclosures and undertaking made in the application.

8. This exemption shall not be construed as exemption from the requirements of any other provisions of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations (e.g. disclosure requirements under Chapter II), the Listing Agreement or any other law.

DR. K. M. ABRAHAM WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA

PLACE: MUMBAI DATE: DECEMBER 2, 2010