SEC trails On’ally cash deal by Renuka
The Securities and Exchange Commission (SEC) is on the money trail of Renuka Capital PLC’s purchase of On’ally Holdings PLC stake, industry sources said.
“The SEC wants to establish the route in the cash transactions based on complaints made by certain parties pertaining to this transaction,” a source told the Business Times. The Business Times also received a letter similar in nature complaining of insider dealing and unethical practices on this same transaction. Renuka bought 23 per cent stake in On’ally Holdings last September and with the recently purchased 12 per cent early this month, which is the stake held by the estate of late O.
Gulamhusein, Renuka now owns 35 per cent. As this is more than 30 per cent, Renuka Capital announced a mandatory offer and the SEC acting in terms of the SEC Act in order to protect the interests of investors, directed Renuka Capital PLC to take steps forthwith to keep to the ‘offer period’ open until further notice by the SEC and give notice of such fact to the market and also to the shareholders of On’ally Holdings PLC in respect of the extension of the said mandatory offer period.
Meanwhile Renuka Capital has told the regulator that nothing wrong was done on their part. “They sent an affidavit to the SEC recently with regard to this,” a source close to the probe told the Business Times.
In a letter dated February 8 to On’ally Holdings PLC, the SEC said that it has received a written complaint against Renuka Capital PLC “the offeror” in the mandatory offer alleging acts of misrepresentation and miscommunication to the market and thereby violating the provisions in the SEC Takeovers and Mergers Code 1995 as amended (TOM Code) and the SEC Rules.
On’ally Holdings PLC was instructed by the SEC to obtain a second Independent Advisor’s Report in respect of the mandatory offer by engaging another qualified advisor who is independent in terms of Rule 12 of TOM Code and submit a draft of the report within one week of engaging the independent advisor for the approval of the SEC in terms of Rule 18 of the Code prior to dispatching same to the shareholders of On’ally Holdings PLC.