It looks like companies have succumbed to the habit of bending the rules dictating corporate governance practices. Moneylife has regularly pointed out cases where such companies and their promoters openly flout regulations at the cost of investors and customers. Tyche Industries is another instance where the company has failed to make the mandatory announcement in changes to its public shareholding pattern.
Apparently, the company underwent a change in public shareholding late last year, when its group company Tyche Chemicals was shown holding a 14.88% stake in the March 2009 shareholding pattern. However, the same company was not in the December 2008 disclosed shareholding pattern. The public shareholding with more than 1% voting rights in the company stood at 2.21% in December quarter 2008, which subsequently rose to 17.08% in March 2009. According to the Securities and Exchange Board of India (SEBI) guidelines on acquisition of shares, any acquisition of shares in a company entitling the acquirer to more than 5% or 10% of the voting rights in the company, is required to be disclosed to the stock exchanges within seven working days of such acquisition.
The SEBI Substantial Acquisition of Shares and Takeovers Regulations, 1997, specifies that “any acquirer, who acquires shares or voting rights which (taken together with shares or voting rights, if any, held by him) would entitle him to more than 5% or 10% or 14% share or voting rights in a company, in any manner whatsoever, shall disclose at every stage the aggregate of his shareholding or voting rights in that company to the company and to the stock exchanges where shares of the target company are listed.”
Interestingly, in the case of Tyche, shareholding among promoters has also undergone a change in this period. G Sandeep, who held 14.11% in Tyche Industries as on December 2008, sold 5% stake to another promoter G Ganesh Kumar. This change comes to light in the March 2009 disclosed shareholding pattern. Under the SEBI guidelines, such sale of stake between promoters of the same company to the extent of 5% or more also requires an announcement to that effect.
Tyche Industries responded to Moneylife’s query saying that Tyche Chemicals was holding stake from 2002 onwards, which was shown in the ‘corporate bodies’ category of shareholders. However, the company still has to disclose the name of the concerned parties holding more than 1% of the total shareholding, which Tyche Industries has not done. — Sanket Dhanorkar with Ravi Samalad and Pratibha Kamath