Order in the matter of Vishnu Sugar Mills Limited

WTM/PS/80/CFD/FEB/2014 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA CORAM: PRASHANT SARAN, WHOLE TIME MEMBER 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 minimum public shareholding requirements

In respect of Vishnu Sugar Mills Limited

1. Securities and Exchange Board of India (hereinafter referred to as 'SEBI') 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. Vishnu Sugar Mills Limited (hereinafter referred to as 'the Company') is one such company against whom the interim order was passed. The promoters' shareholding in the Company on the date of the interim order was 94.38%. The shares of the Company are listed on the Bombay Stock Exchange Limited ('BSE').

3. The Company filed its reply to the interim order vide letter dated June 19, 2013. Thereafter, an opportunity of personal hearing was afforded to the Company on January 23, 2014, when Mr. Pankaj Harlalka, Executive Director appeared along with Mr. Anurag Goyal, Vice President of the Company and made oral submissions. The submissions of the Company inter alia are as follows:

a. The Company was unable to comply with the MPS norms due to unfavourable market condition especially with respect to the sugar industry. Therefore, the Company's promoters, i.e. Mr. K.K. Bajoria and Mr. H.K. Bajoria had expressed their intention, vide letter dated May 14, 2013, to delist the equity shares of the Company from the stock exchanges in accordance with the provisions of the SEBI (Delisting of Equity Shares) Regulations, 2009 (the 'Delisting Regulations'). b. The Board of Directors of the Company in their meeting held on May 20, 2013 had approved the resolution of authorising the delisting of the shares. c. Thereafter, the postal ballot process for seeking approval of the public shareholders of the Company for delisting of shares was dispatched on May 29, 2013. d. The scrutinizer vide its report dated July 01, 2013, has reported that the resolution has been approved with the requisite majority. e. On receipt of the scrutinizer's report, the Company had published the results of the postal ballot in the newspaper on July 02, 2013.

In view of the submissions, the Company requested SEBI for the approval of the delisting process so that the promoters are able to buy the shares which would be tendered and to enable it complete the already initiated process of voluntary delisting. The representatives of the Company also requested SEBI to grant atleast four (4) months period to complete the delisting process.

4. I have considered the reply and the submissions made by the Company and the material available on record. The shareholding of the promoter and the promoter group in the Company is at 94.38% and the public shareholders hold 5.62%. The Company has desired to delist the shares of the Company in terms of the Delisting Regulations. I note from the submissions of the Company that the voluntary delisting has been approved and the resolution thereof has been passed by its shareholders as per the scrutinizer's report dated July 01, 2013. In terms of regulation 8(1)(d) of the Delisting Regulations, the final application for delisting should be made within one year of passing of the special resolution of the shareholders approving the delisting proposal.

5. Considering the promoters intention to delist the shares of the Company, the approval of the board of directors with respect to such proposal for delisting and the approval of the shareholders through postal ballot favouring the proposal for delisting, I am of the view that the Company be permitted to delist its shares in accordance with the provisions of the Delisting Regulations. The Company has also submitted that the directions passed vide the interim order has restricted the Company's promoter from moving ahead with their acquisition of shares in the delisting process and requested to modify the interim order so as to enable the Company/ its promoter to proceed with the delisting process. I find it reasonable and appropriate to modify the directions issued vide the interim order to the extent that the same does not affect or prejudice the efforts of the Company/ its promoters' from continuing with the voluntary delisting process.

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 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 which are in modification of the directions issued vide the interim order dated June 04, 2013 :

(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 already commenced voluntary delisting process initiated by the Company, Vishnu Sugar Mills Limited and that Mr. K.K. Bajoria and Mr. H.K. Bajoria (promoters of the Company) shall be permitted to buy the equity shares from the public shareholders as part of the delisting offer. The Company shall complete the delisting process by June 30, 2014 and shall report the outcome within one (1) months' period from the date of delisting. (ii) The direction contained in 17(b) of the interim order dated June 04, 2013 shall be re-imposed/ revived immediately (without the need for passing of a separate order) in case the delisting process of the Company is not successful within the period directed in sub paragraph (i) above. (iii) 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.

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

8. 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 in paragraph 6(i) above.

9. Copy of this Order shall be served on the stock exchanges and depositories for their information and action that may deem fit and necessary in this case.

PLACE: Mumbai PRASHANT SARAN DATE: February 25th, 2014 WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA