TaxTMI 
TaxTMI 
2016 (12) TMI 255
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....ulations"). A penalty of Rs. 25 lakhs has been imposed on each on the respondents herein for the aforesaid violation. Aggrieved by the aforesaid reversal, Securities & Exchange Board of India (hereinafter referred to as "SEBI") is in appeal before us. 2. The relevant facts are not in dispute. The first respondent herein - Burren Energy India Ltd. (hereinafter referred to as "Burren") was incorporated in December, 2004 under the laws of England and Wales with its registered office in London. Burren was formed to acquire the entire of the equity share capital of one Unocal Bharat Limited (hereinafter referred to as "UBL"), incorporated in Mauritius in July, 1996. The shares of the aforesaid UBL were acquired in September, 1996 by one Unocal ....
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....sons on the board of directors of the target company. This, according to SEBI, amounted violation of Regulation 22(7) of the Regulations inasmuch as the said appointment was made during the offer period which had commenced on and from 14th February, 2005 i.e. date of execution of the share purchase agreement. 6. To appreciate the issue the provisions of Regulation 2(1)(f) of the Regulations which defines 'offer period' and Regulation 22(7) of the Regulations alleged to have been violated by the respondents may be extracted below: "2(1)(f) "Offer period" means the period between the date of entering into Memorandum of Understanding or the public announcement, as the case may be and the date of completion of offer formalities relat....
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....of completion of offer formalities. The learned Tribunal was of the view that when there was no ambiguity or uncertainty in the provisions of the Regulations the definition of 'offer period' has to be literally interpreted. The learned Tribunal went into the dictionary meaning of the expression 'Memorandum of Understanding' and went on to hold that the same falls short of a concluded contract. As there was no Memorandum of Understanding between the parties it is the date of public announcement that would trigger of the commencement of the 'offer period'. As the appointment of the Directors in the target company was made on 14th February, 2005 and the public announcement was made on 15th February, 2005 the learned Tri....
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....e inasmuch as the disqualification from appointment on the board of directors of the target company will operate only when the acquirer or persons acting in concert are individuals and not a corporate entity. This is because under Section 253 of the Companies Act, 1956 (corresponding to Section 149 of the Companies Act, 2013) there is an embargo on a body corporate from being appointed as a director. Shri Divan has also drawn the attention of the Court to the provisions of Regulation 22(7) of the Regulations as it originally existed; its amendment in the year 2002 (which provision is relevant for the purposes of the present case) and the subsequent amendment effected in the year 2011. Shri Divan has submitted that meaning sought to be attri....