October 2010, it was impossible for the company to make such a disclosure for a period prior to October 2010 pursuant to the listing agreement or under the Takeover Regulations 2011.
"However, we submit that both the transferor and transferee have been holding shares as promoters of the company for more than three years. Kailash Gupta is the promoter/shareholder of the company since October 3, 2005 and Ajay Gupta is the promoter/shareholder of the company since December 23, 2006," it said.
After studying the company's arguments, Sebi said the relevant regulations clearly state that the promoters can transfer shares amongst themselves only if three conditions are fulfilled, the first being the persons named as promoters in the shareholding pattern filed by the target company in terms of the listing agreement for a continuous period of three years prior to the proposed acquisition.
"Since the company was listed in October 2010 only, the shareholding pattern in terms of the listing agreement is available only for two years. Thus, prima facie the promoters do not qualify for the inter-se transfer since they are not complying with one of the pre-requisites (mentioned as the first condition)," Sebi said.
The regulator, however, clarified that its position is based on the information furnished by the company in reference to the present case and different facts or conditions might lead to a different result.