Order in the matter of Aanjaneya Lifecare Limited (Now known as Dr. Datsons Labs Limited)

WTM/RKA/EFD-DRA-I/51/2016 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA ORDER Under section 11B of the Securities and Exchange Board of India Act, 1992 read with regulation 3(2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 - in respect of Finaventure Capital Limited, Mr. Kannan Vishwanath and Dr. Ashleys Labs Limited. In the matter of Aanjaneya Lifecare Limited (Now known as Dr. Datsons Labs Limited)

1. Based on the complaints received, SEBI conducted investigation into dealing in the shares of Aanjaneya Lifecare Limited (hereinafter referred to as the ‘target company’) during May 2012 to May 2013 (investigation period). The name of the target company was changed to Dr. Datsons Labs Ltd. with effect from September 02, 2013. The shareholding pattern of the target company during the relevant quarters ended March 2012 to June 2013 was as following:- Table-1: Shareholding Pattern during March 2012 To June 2013

Quarter ended Mar 2012 Quarter ended June 2012 Quarter ended Sep 2012 No. ofNo. Of% toShares % to no.ofNo. ofNo. Of% toShares % toNo. ofNo. Of% toShares % to Particular share shares total pledged orshares share shares total pledged orno.of share shares total pledged orno.of holders shares otherwise holders shares otherwise shares holders shares otherwise shares encumbered encumbered encumbered Promoter 4 7987140 57.51 2073000 25.95 4 7274433 52.38 3816000 52.46 4 6607433 47.58 5794500 87.7 Holding Non Promoter 916 5900011 42.49 1607 6612718 47.62 982 7279718 52.42 Holding Total share 920 13887151 100 2073000 14.93 1611 13887151 100 3816000 27.48 986 13887151 100 5794500 41.73 capital Particular Quarter ended Dec 2012 Quarter ended Mar 2013 Quarter ended June 2013 No. ofNo. Of% toShares % to no.ofNo. ofNo. Of% toShares % toNo. ofNo. Of% toShares % to share shares total pledged orshares share shares total pledged orno.of share shares total pledged orno.of holders sharesl otherwise holders shares otherwise shares holders shares otherwise shares encumbered encumbered encumbered Promoter 4 6497433 46.79 6133900 94.4 4 5724426 41.22 5392100 94.19 2 3520006 25.35 3182700 90.42 Holding Non Promoter 1114 7389718 53.21 1965 8162725 58.78 3880 10367145 74.65 Holding Total share 1118 13887151 100 6133900 44.17 1969 13887151 100 5392100 38.83 3882 13887151 100 3182700 22.92 capital

2. It was observed that during the period March 2012 - June 2013, the total promoters' shareholding in the share capital of the target company reduced from 57.51% in quarter ended March 2012 to 25.35% in the quarter ended June 2013. During this period, the shareholding of Finaventure Capital Limited in the target company had reduced from 42.89%

Order in the matter of Aanjaneya Lifecare Limited to 8.98%, i.e., a reduction of 33.91% and that of Mr. Kannan Vishwanath increased from 14.62% to 16.37% of the share capital, i.e., an increase of 1.75% as shown in the following table: Table-2: Details of the promoters' shareholding (March 2012 - June 2013) Sr. Name Quarter ending Quarter ending Quarter ending Quarter ending Quarter ending Quarter ending no. Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Total No. %age Total %age Total %age Total %age Total %age Total %age of Shares No. of No. of No. of No. of No. of Shares Shares Shares Shares Shares Finaventur 1 e Capital 5956172 42.89 5320172 38.31 4653172 33.51 4543172 32.71 3451765 24.86 1247365 8.98 Limited Kannan 2 Vishwanat 2030948 14.62 1954241 14.07 1954241 14.07 1954241 14.07 2272641 16.37 2272641 16.37 h KashiVish 3 10 0.00 10 0.00 10 0.00 10 0.00 10 0.00 - -wanath DivyaVish 4 10 0.00 10 0.00 10 0.00 10 0.00 10 0.00 - -wanath Total Promoter 7987140 57.51 7274433 52.38 6607433 47.58 6497433 46.79 5724426 41.22 3520006 25.35 Holding Total 1388715 Share 13887151 100 100 13887151 100 13887151 100 13887151 100 13887151 100 1 Capital

3. It was also observed that during the investigation period, the top 10 clients contributed 17% and 15% of the gross purchase and gross sales on NSE and 23.09% and 18.87% on BSE, respectively as shown in the following tables:

Table-3: Gross Purchase and Gross Sales of Top 10 Clients on NSE

% of % of Gross Gross Sell Buy Client Name Total Buy to Selling Client Name Total to Mkt. Mkt. Volume Volume Jayneel Securities CSA Holdings Pvt. Ltd. 707345 3.00 484056 2.05 Private Limited Bakulesh Trambaklal Shah 480233 2.04 Chetan Rasiklal Shah 466026 1.98 CSA Holdings Pvt. Chetan Rasiklal Shah 441922 1.87 426096 1.81 Ltd. Jayneel Securities Private Finaventure Capital 417424 1.77 404456 1.72 Limited Limited Quadeye Securities Quadeye Securities Pvt. Ltd. 393980 1.67 393670 1.67 Pvt. Ltd. Revathi Shares Pvt. KBS Trading Pvt. Ltd. 335000 1.42 325101 1.38 Ltd. Crosseas Capital Services Pvt. Crosseas Capital 297112 1.26 299892 1.27 Ltd. Services Pvt. Ltd. Shimon Commotrade Private 293616 1.25 Gajanan Enterprises 267359 1.13 Limited Dipan Mehta Share Revathi Shares Pvt. Ltd. 273469 1.16 and Stock Brokers 264116 1.12 Pvt. Ltd.

% of % of Gross Gross Sell Buy Client Name Total Buy to Selling Client Name Total to Mkt. Mkt. Volume Volume Kannan Vishwanath 270800 1.15 MBL & Co. Limited 262437 1.11 Top 10 Buy Clients 3910901 17 Top 10 Selling Clients 3593209 15 Remaining Clients 19670946 83 Remaining Clients 19988638 85 Total Traded Total Traded Volume 23581847 100 23581847 100 Volume

Table-4: Gross Purchase and Gross Sales of Top 10 Clients BSE % of % of Gross Gross Buy to Sell to Mkt. Mkt. Volum Volum Buy Client Name Total e Selling Client Name Total e Quadeye Securities Bakulesh Trambaklal Shah 861415 5.99 389534 2.71 Pvt. Ltd. Jayneel Securities Jayneel Securities Private Limited 410150 2.85 340518 2.37 Private Limited Shentracon Trexim Quadeye Securities Pvt. Ltd. 389396 2.71 300000 2.09 Private Limited Crosseas Capital Crosseas Capital Services Private 300034 2.09 Services Private 297099 2.07 Limited Limited Yaduka Financial CSA Holdings Pvt. Ltd. 248270 1.73 281000 1.95 Services Limited Revathi Shares Pvt. Chetan Rasiklal Shah 242331 1.69 278586 1.94 Ltd. KBS Trading Pvt. Ltd. 237500 1.65 Chetan Rasiklal Shah 231146 1.61 Gajanan Enterprises 220722 1.53 Gajanan Enterprises 217353 1.51 Primesec Investments Shimon Commotrade Pvt. Ltd. 214349 1.49 201985 1.40 Limited Finaventure Capital Revathi Shares Pvt. Ltd. 197168 1.37 177550 1.23 Limited Top 10 Buy Clients 3321335 23.09 Top 10 Sell Clients 2714771 18.87 Remaining Clients 11063582 76.91 Remaining Clients 11670146 81.13 Total Traded Total Traded Volume 14384917 100.00 14384917 100.00 Volume 4. The promoters, viz. Finaventure Capital Ltd. and Mr. Kannan Vishwanath were from amongst the top ten buyers and sellers at NSE and BSE in the scrip of the target company during the investigation period. Another entity, viz. Dr. Ashleys Labs Limited had purchased and sold shares of the target company at NSE and BSE during the investigation period. Trading details of these three entities at NSE and BSE are given in the following table:

Table-5: Trading details Finaventure Capital Ltd., Mr. Kannan Vishwanath and Dr. Ashleys Labs Limited Gross Gross Gross Net Gross Sell Sr. No. Name Buy Sell Buy Net BSE NSE BSE NSE NSE BSE 1 Kannan Vishwanath 270800 79409 191391 47450 46707 743 2 Finaventure Capital 59000 404456 -345456 55006 177550 -122544 Limited 3 Dr. Ashleys Labs Limited 44569 68784 -24215 78230 41283 36947

5. Finaventure Capital Limited, Mr. Kannan Vishwanath the promoters of the target company had common address with target company. Dr. Ashleys Labs Limited a promoter related company had a common director Mr. Shashi Kant Shinde with the target company.

6. Finaventure Capital Limited (32.71%), Mr. Kannan Vishwanath (14.07%) were already collectively holding more than 45% of the total shareholding of the target company in the quarter ending December 2012. They alongwith Dr. Ashleys Labs Ltd. bought a total of 8,02,055 shares (5.77%) of the company during the financial year 2012 - 13 on gross buy basis as given in the following table:

Table -6: Gross purchase by Finaventure Capital Limited, Mr. Kannan Vishwanath and Dr. Ashleys Labs Limited % to total share holding Cumulative of the Date Name NSE BSE Total total Company 09.04.2012 Finaventure Capital Limited 25000 25000 50000 50000 0.36 12.04.2012 Finaventure Capital Limited 25000 25000 50000 100000 0.72 25.04.2012 Finaventure Capital Limited 21000 21000 42000 142000 1.02 27.04.2012 Finaventure Capital Limited 50000 50000 100000 242000 1.74 28.04.2012 Finaventure Capital Limited 2500 2500 5000 247000 1.78 08.05.2012 Finaventure Capital Limited 42500 28500 71000 318000 2.29 15.06.2012 Finaventure Capital Limited 10000 10000 328000 2.36 10.07.2012 Kannan Vishwanath 20000 20000 348000 2.51 25.07.2012 Kannan Vishwanath 50300 12000 62300 410300 2.95 26.07.2012 Kannan Vishwanath 13000 13000 423300 3.05 27.07.2012 Kannan Vishwanath 14250 14250 437550 3.15 30.07.2012 Kannan Vishwanath 2500 2500 440050 3.17 31.07.2012 Kannan Vishwanath 9000 9000 449050 3.23 02.08.2012 Kannan Vishwanath 3000 3000 452050 3.26 03.08.2012 Kannan Vishwanath 1500 1500 453550 3.27 16.08.2012 Kannan Vishwanath 2500 2500 456050 3.28 24.08.2012 Kannan Vishwanath 15000 15000 471050 3.39 28.08.2012 Finaventure Capital Limited 16500 16500 33000 504050 3.63 29.08.2012 Kannan Vishwanath 7500 7500 511550 3.68

% to total share holding Cumulative of the Date Name NSE BSE Total total Company 31.08.2012 Kannan Vishwanath 10000 10000 521550 3.76 03.09.2012 Kannan Vishwanath 11100 11100 532650 3.84 04.09.2012 Kannan Vishwanath 16500 23000 39500 572150 4.12 20.09.2012 Finaventure Capital Limited 0 6 6 572156 4.12 26.09.2012 Kannan Vishwanath 6500 6500 578656 4.17 27.09.2012 Kannan Vishwanath 750 750 579406 4.17 28.09.2012 Kannan Vishwanath 1850 1850 581256 4.19 11.12.2012 Kannan Vishwanath 12000 12000 593256 4.27 13.12.2012 Kannan Vishwanath 14700 12450 27150 620406 4.47 14.12.2012 Kannan Vishwanath 7700 7700 628106 4.52 17.12.2012 Kannan Vishwanath 21150 21150 649256 4.68 18.12.2012 Kannan Vishwanath 3500 3500 652756 4.70 26.12.2012 Dr. Ashleys Labs Limited 500 300 800 653556 4.71 28.12.2012 Dr. Ashleys Labs Limited 0 300 300 653856 4.71 31.12.2012 Dr. Ashleys Labs Limited 0 19888 19888 673744 4.85 31.12.2012 Kannan Vishwanath 12500 12500 686244 4.94 03.01.2013 Dr. Ashleys Labs Limited 201 0 201 686445 4.94 07.01.2013 Dr. Ashleys Labs Limited 500 7500 8000 694445 5.00 09.01.2013 Dr. Ashleys Labs Limited 1750 523 2273 696718 5.02 10.01.2013 Dr. Ashleys Labs Limited 420 0 420 697138 5.02 11.01.2013 Dr. Ashleys Labs Limited 2081 6347 8428 705566 5.08 15.01.2013 Dr. Ashleys Labs Limited 2102 0 2102 707668 5.10 16.01.2013 Dr. Ashleys Labs Limited 7015 7373 14388 722056 5.20 18.01.2013 Dr. Ashleys Labs Limited 0 388 388 722444 5.20 21.01.2013 Kannan Vishwanath 14000 14000 736444 5.30 22.01.2013 Dr. Ashleys Labs Limited 15000 0 15000 751444 5.41 04.02.2013 Dr. Ashleys Labs Limited 15000 0 15000 766444 5.52 13.02.2013 Dr. Ashleys Labs Limited 0 1751 1751 768195 5.53 14.02.2013 Dr. Ashleys Labs Limited 0 2449 2449 770644 5.55 15.02.2013 Dr. Ashleys Labs Limited 0 15000 15000 785644 5.66 20.02.2013 Dr. Ashleys Labs Limited 0 4485 4485 790129 5.69 25.02.2013 Dr. Ashleys Labs Limited 0 11926 11926 802055 5.78 Total 802055 Total shareholding of the Company 13887151 7. With the acquisition of total 8000 shares of the target company by Dr. Ashleys Labs Limited on January 07, 2013, as aforesaid, the shareholding of Finaventure Capital Limited alongwith its PACs exceeded more than 5% (5.00063%) of the share capital of the target company.

8. Based on the above, a show cause notice (SCN) dated January 28, 2016 was issued to Finaventure Capital Limited, Mr. Kannan Vishwanath and Dr. Ashleys Labs Limited (hereinafter collectively referred to as 'the noticees' and individually by their respective names) as they together purchased 8,02,055 shares, i.e., 5.77% of the shareholding of the company during financial year 2012-13 and thereby they had violated regulation 3(2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (hereinafter referred to as the "Takeover Regulations") by failing to make an open offer in accordance with the said Regulations. The noticees were called upon to show cause as to why suitable directions under section 11B of the SEBI Act and regulation 3(2) of the Takeover Regulations should not be issued against them.

9. The noticees filed their replies to the SCN vide their letters dated February 22, 2016 wherein they denied the allegations mentioned in the SCN and submitted that they had complied with all the regulations which are mentioned in the SCN. They have also inter alia submitted that:

(i) They entered into various transactions over a period of time in the scrip of the company and are not able to confirm the trades which is mentioned in the SCN. (ii) They maintained the relevant files at the registered office of the company There was heavy flooding in company office situated in low lying area which fully damaged the files pertaining to the accounts and compliance department of the company, which also included bills/voucher pertaining to payment and expenditure. Therefore, they do not have the acknowledgement copy which is received from company during this period for the execution of the trades. (iii) The Hon’ble Bombay High Court passed the order for winding up of the company on January 12, 2016 and for appointment of provisional liquidator as the official liquidator of the company. (iv) They do not have any documents or materials pertaining to the company. They maintained all the documents and information at the registered office of the company which is under the possession of the lead bank and official liquidator of the company. (v) Mr. Kannan Vishwanath also stated that he had resigned from the company on February 14, 2015 and has requested to exempt him from personal hearing for medical reasons.

10. Since Mr. Kannan Vishwanath had waived the opportunity of personal hearing the other noticees, viz. Finaventure Capital Limited and Dr. Ashleys Labs Limited were granted an opportunity of personal hearing on April 12, 2016 and notices in this regard were served upon them through affixture of hearing notices at their respective addresses but they have failed to avail the opportunity. It is noted that all the noticees have filed their replies to the SCN. One of them has waived the opportunity of personal hearing and other two have failed to avail the same despite service of notice upon them in this regard. Considering these facts and circumstances, I am of the view that principles of natural justice have been complied with in this matter and the mater can be proceeded with on the basis of SCN, replies/submissions of the noticee and relevant material available on record.

11. From the SCN it is noted that it seeks to charge the three noticees that they have violated the provisions of regulation 3(2) of the Takeover Regulations and the charge has been leveled on the basis that they were persons acting in concert (PACs) with regard to each others' acquisitions during the financial year 2012-13. In this case, the noticees have not disputed their transactions as described in the SCN but have denied the charges and allegations of violation of the Takeover Regulations as alleged in the SCN.

12. Before dealing with the merits of the case, I deem it necessary to refer to the relevant provisions of the Takeover Regulations referred to in the SCN as under-

Regulation 2(1)(q)- “persons acting in concert” means,— (1) persons who, with a common objective or purpose of acquisition of shares or voting rights in, or exercising control over a target company, pursuant to an agreement or understanding, formal or informal, directly or indirectly co-operate for acquisition of shares or voting rights in, or exercise of control over the target company.

(2) Without prejudice to the generality of the foregoing, the persons falling within the following categories shall be deemed to be persons acting in concert with other persons within the same category, unless the contrary is established,— (i) a company, its holding company, subsidiary company and any company under the same management or control; (ii) a company, its directors, and any person entrusted with the management of the company; (iii) directors of companies referred to in item (i) and (ii) of this sub-clause and associates of such directors; (iv) promoters and members of the promoter group; (v) immediate relatives; (vi)a mutual fund, its sponsor, trustees, trustee company, and asset management company; (vii)a collective investment scheme and its collective investment management company, trustees and trustee company; (viii)a venture capital fund and its sponsor, trustees, trustee company and asset management company; (ix)a foreign institutional investor and its sub-accounts; (x)a merchant banker and its client, who is an acquirer; (xi)a portfolio manager and its client, who is an acquirer; (xii) …….. (xiii)……..

Regulation 3(2)- "No acquirer who together with persons acting in concert with him, has acquired and holds in accordance with these regulations shares or voting rights in a target company entitling them to exercise twenty-five per cent or more of the voting rights in the target company but less than the maximum permissible non-public shareholding, shall acquire within any financial year additional shares or voting rights in such target company entitling them to exercise more than five per cent of the voting rights, unless the acquirer makes a public announcement of an open offer for acquiring shares of such target company in accordance with these regulations".

13. In terms of the aforesaid regulation 3(2) an acquirer who together with PACs with him holds 25% shares/voting rights in a target company can acquire within any financial year maximum 5% shares/voting rights without triggering the obligation to make the open offer under the said regulation. As provided in Explanation (i) to regulation 3(2), for the purpose of determining the quantum of acquisition of additional voting rights under this sub-regulation gross acquisition alone shall be taken into account regardless of any intermittent fall in the shareholding or voting rights whether owing to disposal of shares held or dilution of voting rights owing to fresh issue of shares by the target company.

14. From the above scheme of regulation 3(2) it is clear that for invoking this regulation, it is mandatory to establish that:

(a) the acquire together with PACs with him already holds 25% shares/ voting rights in the target company;

(b) the acquirer acquires more than 5% shares/voting rights in the target company in a financial year; and (c) the gross acquisition alone in the financial year should be more than 5% limit, regardless of intermittent disposal /dilution in the financial year.

15. In this case, the SCN has been issued based on the basis of the change in shareholding of the promoters during the quarter during the quarter ended March 2012 to June 2013 in as much as it relies upon the fact that during this period:

(a) the total shareholding of the promoters in the target company reduced from 57.51% to 25.35%;

(b) the shareholding of Finaventure Capital Limited had reduced from 42.89% to 8.98% (i.e., reduction of 33.91%);

(c) the shareholding of Mr. Kannan Vishwanath increased from 14.62% to 16.37% (i.e., increase of 1.75%)

16. The aforesaid basis in the SCN is vague and ambiguous as it fails to reason as to why the period between quarter ended March 2012 to June 2013 has been chosen for examination for the purpose of regulation 3(2) wherein the relevant period is a financial year, i.e., a period of 12 months commencing on the first day of the month of April. I note from the above Table 1 that the financial year for the purpose of this case would be a period of 12 months commencing on April 1, 2012, (i.e., the financial year 2012-13). From the said Table 1 it is noted that during this financial year the total shareholding of the promoters had reduced from 57.51% as on April 1, 2012 to 41.22% as on March 31, 2013. From Table 2 above, it is noted that the individual shareholding of Finaventure Capital Limited had reduced from 42.89% as on April 1, 2012 to 24.86% as on March 31, 2013 i.e., reduction of 18.03% during the financial year 2012 -13. Further, during this financial year the shareholding of Mr. Kannan Vishwanath increased from 14.62% as on April 1, 2012 to 16.37% as on March 31, 2013 (i.e., increase of 1.75%).

17. From Tables 3 and 4 it is noted that Mr. Kannan Vishwanath was from amongst the top ten buyers and sellers on NSE and Finaventure Capital Limited was from amongst top ten buyers and sellers on BSE during the investigation period (May 2012 to May 2013). In my view, for the purpose of this case this data is irrelevant/insignificant. The SCN further relies upon the fact that in the quarter ended December 2012, these two promoter viz. Finaventure Capital Limited (32.71%) and Mr. Kannan Vishwanath (14.07%) were collectively holding more than 45% shares in the target company. Reliance placed on shareholding of these two promoter only that too on December 2012 is also misplaced. What is relevant for this case is whether any promoter individually (himself or alongwith PACs with him) or all the promoters collectively breached the 5% limit specified in regulation 3(2) during the financial year April 2012- March 2013. In this case, admittedly, none of the noticees have, individually, breached this threshold limit by virtue of their individual gross acquisitions during the financial year 2012-13. The SCN is silent as to whether gross purchase by these two promoters increased total promoters' shareholding (who together held more than 25% shares/voting rights in the target company) beyond 5% permissible creeping limit.

18. From Tables 2 and 6 it is inferred that Finaventure Capital Limited and Mr. Kannan Vishwanath were holding 42.89% and 14.62% shares, respectively in the target company as on March 31, 2012. Thus, their collective shareholding in the target company, as on March 31, 2012, was 57.51% of its total equity share capital. Their collective gross acquisitions during the financial year 2012-13 (i.e., from April 09, 2012 to December 31, 2012) were only 4.94% and thus, their collective acquisition during the financial year 2012-13 were within 5% permissible creeping limit and there was no breach of regulation 3(2) at all by virtue of their collective acquisitions during this financial year. It is noted that only because the acquisition of 8,000 shares, on January 07, 2013, by Dr. Ashleys Labs Limited has been added with the gross purchases of the aforesaid two promoters, it has been alleged that the threshold was breached on January 07, 2013 (cumulative acquisitions as on this date was 5.00063%); and by adding its further acquisitions till February 25, 2013 it has been alleged that collective gross acquisition of these three noticees was 5.78% during the financial year 2012-13.

19. In order to determine the obligation of the noticees based on the charge as alleged in the SCN it is important to examine whether they were acting in concert with each other for acquiring more than 5% shares/voting rights in the target company during the financial year 2012-13. 20. From the aforesaid provisions of regulation 2(1)(q) (1)of the Takeover Regulations it is noted that the concept of PAC therein is acquisition specific and the bright line test to determine identity of the parties is their commonality of objective or purpose and community of interest to acquire shares or voting rights in a target company. This bright line test also applies for the deeming categories under regulation 2(1)(q)(2). It is noted that under regulation 2(1)(q)(2)(iv), the 'promoters' and the members of the promoter group' are deemed to be 'persons acting in concert'. However, if they can establish the contrary and show that they did not have commonality of objective or purpose and community of interest to acquire additional shares or voting rights beyond the prescribed threshold, they can be absolved of the charge.

In this case, Finaventure Capital Ltd. and Mr. Kannan Vishwanath were admittedly promoters of the target company at the relevant time. Thus, they both are deemed PACs under regulation 2(1)(q)(2)(iv). They have not established anything contrary to show that they did not have any commonalty of objectives to acquire additional shares. The SCN is, however, silent as to why other promoters are not deemed to be PACs with regard to the acquisitions of these two promoters during the financial year 2012-13. It is not the case that these two promoters only held entire promoters' shareholding/voting rights/control in the target company and other promoters were not in concert with them. The SCN has chosen only these two promoters to be acting in concert. Thus, the charge fails on the ground of this ambiguity and vagueness alone. Further, even if it were to be assumed that other promoters did not have commonalty of objective with regard to the gross acquisitions of these two promoters the collective increase in the shareholding of these two promoters and also of all the promoters was admittedly 4.94% i.e.; less than 5% threshold of permissible creeping acquisition during the financial year 2012-13.

21. It is noted that the acquisition of 8,000 shares by Dr. Ashleys Labs Limited on January 07, 2013 is alleged as trigger date as per the SCN. For the purpose of the instant SCN, it is necessary to examine whether Dr. Ashleys Labs Limited was acting in concert with Finaventure Capital Ltd. and Mr. Kannan Vishwanath with common objective to acquire additional shares/voting rights in the target company on January 07, 2013. It is admitted fact that Dr. Ashleys Labs Limited was not a promoter of the target company at the relevant times nor it was disclosed as PACs with the promoters and thus, it was not a deemed PAC in terms of regulation 2(1) (q) (2)(iv) of the Takeover Regulations. Thus, the case has to be examined under regulation 2(1) (q)(1). It is settled position that the requisite commonality of objective or community of interest under regulation 2(1)(q) can be gathered from the facts and circumstances including the act and conduct of the parties. In the instant case, the SCN does not allege any concerted action on the part of Dr. Ashleys Labs Limited, Finaventure Capital Ltd. and Mr. Kannan Vishwanath to indicate commonality of objective.

The SCN merely refers it PAC of other two noticees but does not mention any factor as basis of such reference. The only fact mentioned in the Annexure to SCN is relation between Dr. Ashleys Labs Limited and the target company on the basis of a common director. Even this factor, in my view, is not sufficient to even suggest a concerted action on the part of Dr. Ashleys Labs Limited with other two noticees to acquire additional shares/voting rights in the target company beyond permissible 5% creeping limit during financial year 2012-13. Thus, SCN is without any basis and the charge of violation of regulation 3(2) has not been brought home therein. 22. It is also noted that as per the order dated January 12, 2016 passed by Hon'ble High Court of Bombay the target company has been ordered to be wound up and as per the MCA master data it is under Liquidation. 23. Considering the above, I do not deem it necessary to issue any direction as contemplated in the show cause notice dated January 28, 2016 and the same is disposed of accordingly.

Sd/-

Date: MAY 12th, 2016 RAJEEV KUMAR AGARWAL PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA