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The Competition Commission of India approves the acquisition of equity shares and subsequent gift transfer involving Indo Rama Synthetics (India) Limited. Mr. Aloke Lohia acquires equity shares of Indo Rama Synthetics (India) Limited from Brookgrange Investment Limited under a share purchase agreement. Mr. Aloke Lohia transfers these shares by gift to Ms. Urmila Lohia after closing of the agreement. The proposed transaction increases the shareholding of the O.P. Lohia Group to approximately thirty-six percent. The target company remains under the joint control of the O.P. Lohia Group and the Aloke Lohia Group.
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COMPETITION COMMISSION OF INDIA
Combination Registration No. C-2023/09/1055
6^th November 2023
Notice under Section 6(2) of the Competition Act, 2002 given by Mr. Aloke Lohia and Ms. Urmila Lohia
CORAM:
Ms. Ravneet Kaur
Chairperson
Mr. Anil Agrawal
Member
Ms. Sweta Kakkad
Member
Mr. Deepak Anurag
Member
Order under Section 31(1) of the Competition Act, 2002
On 27^th September 2023, the Competition Commission of India (Commission) received a notice under Section 6(2) of the Competition Act, 2002 (Act), given by Mr. Aloke Lohia and Ms. Urmila Lohia (collectively "Acquirers"). The notice relates to a composite transaction envisaging acquisition of 20.51 percent equity shares of Indo Rama Synthetics (India) Limited (IRSL) by Mr. Aloke Lohia from Brookgrange Investment Limited (Brookgrange) (Brookgrange Shares) pursuant to a Share Purchase Agreement executed between Mr. Aloke Lohia and Brookgrange on 25^th September 2023 (SPA); and transfer (by way of gift) of Brookgrange Shares by Mr. Aloke Lohia to Ms. Urmila Lohia pursuant to a gift deed to be prepared and executed after closing of the SPA (Proposed Transaction^1).
In terms of Regulations 14(3) of the Combination Regulations, the Commission, vide communication dated 19^th October 2023, sought certain information and clarifications regarding, inter alia, shareholding/control of IRSL, activities of IRSL, etc. The response was submitted by the Acquirers on 23^rd October 2023. The Acquirers also made certain voluntary submissions on 1^st November 2023.
IRSL is a public listed company. The promoters of IRSL include Mr. Om Prakash Lohia, Ms. Urmila Lohia, Mr. Vishal Lohia, Ms. Rimple Lohia (collectively, "O.P. Lohia Group") and Mr. Aloke Lohia, Mr. Yashovardhan Lohia, Ms. Aradhana Lohia, Indorama Netherlands B.V.^2 and Brookgrange^3 (collectively, "Aloke Lohia Group"). Based on the information on record, it is noted that around 15.51 percent shareholding of IRSL is held by O.P. Lohia Group and 59.33 percent shareholding of IRSL is held by Aloke Lohia Group while remaining shareholding is held by public. Further, citing the inter se arrangement as regards the control over the management and affairs of IRSL, the Acquirers submitted that IRSL is presently under joint control of O.P. Lohia Group and Aloke Lohia Group.
As observed, there are certain specificities of the Proposed Transaction which need to be considered before going into the assessment of the Proposed Transaction for any impact on market dynamics. The Commission observed that the Proposed Transaction would have the impact of increase in shareholding of O.P. Lohia Group to around 36 percent
^1 An undertaking has been filed on behalf of Mr. Aloke Lohia (Undertaking), as per which it has been stated that within fifteen (15) working days of the Brookgrange Shares being credited in the demat account of Mr. Aloke Lohia, he will gift and transfer the same to Ms. Urmila Lohia to complete the Proposed Transaction. ^2 Ultimately held by Indorama Ventures Limited (IVL) which is ultimately controlled by Mr. Aloke Lohia and his immediate family. ^3 Mr. Aloke Lohia and Mr. Yashovardhan Lohia are indirectly ultimate beneficiaries of Brookgrange.
