Sebi slaps Rs 25 lakh penalty on National Oilwell, Plaudler

Capital market watchdog Sebi today imposed a penalty of Rs 25 lakh on National Oilwell Varco Inc and Plaudler Inc for violating takeover norms with respect to GMM Pfaudler Ltd.
GMM Pfaudler is a supplier of engineered equipment and systems for critical applications in the global chemical and pharmaceutical markets.
After finding them violating takeover regulations, Sebi slapped a penalty of Rs 25 lakh on National Oilwell Varcob and Plaudler. The former was the acquirer and the latter was a person acting in concert (PAC).
"The noticees shall be jointly and severally liable to pay the said monetary penalty," Sebi's order said.

According to the regulator, National Oilwell Varco and Pfaudler made the public announcement for the first time about the indirect acquisition of the company's shares only on February 22, 2013 -- which was a delay of about six-and-half months.
National Oilwell Varco along with Pfaudler had filed an offer document to acquire over 38 lakh shares, representing 26 per cent stake in GMM Pfaudler.

The public announcement for the same was made on February 22, 2013.
"Failure to make public announcement to acquire shares at a minimum price is a serious matter, and cannot be considered a mere 'technical' lapse, even if the transaction is otherwise in compliance, since the shareholders/ investors were deprived of an exit opportunity at the relevant point of time," the order said.

Sebi had found that the open offer was triggered back in August 2012 pursuant to a merger agreement entered into between Robbins & Myres, its wholly-owned subsidiary Raven Process Crop and National Oilwell Varco.
"The merger agreement was contracted on August 8, 2012 and completed and implemented on February 20, 2013. The offer was triggered on account of the merger agreement, pursuant to which the noticees acquired the entire share capital of Robbins & Myres," the order said.
Robbins & Myres holds the entire share capital of Robins & Myers Holdings, which in turn holds the entire share capital of Pfaudler -- which has 51 per cent voting share capital of GMM Pfaudler (target company).

According to Sebi, the public announcement with regard to the merger agreement should have made within four working days from August 8, 2012 but was only made in February 2013.