- Here is our current No 1 shareholder making waves in todays...

- Here is our current No 1 shareholder making waves in todays Age ........ feedback welcome.


" Regulators slap family wrist in a knot of relationships July 7, 2011

FAROOQ Khan and his sister Ambreen Chaudhri, have been heavily slapped on the wrist by the Takeovers Panel over recent share dealings in the listed Bentley Capital that elevated their stakes to a combined 46 per cent of the company - but where, oh where, is the corporate regulator?

The panel, chaired in this case by Ian Ramsay, walked away from declaring unacceptable the April share buying by Chaudhri's Data Base Systems after the parties agreed to legally enforceable undertakings that they will either get shareholder approval for the acquisition or sell the shares.

The panel was only poked into action by another shareholder, Bellwether Investments, which complained not only of Chaudhri's April acquisition, but the circumstances of its initial investment in 2009.

The Takeovers Panel reckoned activities in 2009 were outside its jurisdiction. Insider would note, though, that they are still well within the power of the Australian Securities and Investments Commission.

Bellwether, an investment company belonging to the family of Macquarie banker Jim Craig, argued initially to the panel that the fact Khan owned 28 per cent of Bentley when Chaudhri's DBS picked up its first 10.5 per cent in 2009 would seem to breach takeover laws.

Buying an additional 8 per cent in April (DBS bought shares that had belonged to the family of Bentley director Peter Simpson who died last year) at 22? a share prompted Bellwether to complain about both incidents.

Initially, the panel rejected the request because, in spite of Khan and Chaudhri being related by blood, there was not enough proof that their share dealings were related. Chaudhri's husband, Azhar, also sits on the board of Khan's listed Queste Communications, which holds some of the former's Bentley stake.

Bellwether apparently turned up further material about corporate relationships, shifting the panel's position and resulting in last night's penalty.

But if the Takeovers Panel reckons there is tangible evidence the dealings in Bentley of Khan and Chaudhri's interests are related then it is high time ASIC stepped in to find out how related parties could increase their grip on a public company from a quarter to almost a half without minority shareholders getting either a say, or at least an offer for their shares. Just because Bentley is tiny does not mean investors are subject to any less protection under the law than those with BHP Billiton or ANZ shares.

Chaudhri and DBS now have to call a meeting of Bentley's shareholders, at their own expense, to approve them having bought the stock. No person or entity in the Khan and Chaudhri camps will be allowed to vote on it. If Bentley investors approve the acquisition, they deserve what they get in handing over control of their company without getting a takeover offer.

It is notable Bellwether, which sold down its take below 5 per cent in 2009, bought enough shares to take it back above the level at which it could requisition a shareholder meeting. Unlike the discounted 22? a share paid by DBS, Bellwether paid 24.5? for the top-up.

The Bentley affair is not Khan's first run-in with the panel. In 2005, while wrestling for control of Rivkin Financial Services, he was forced to put on hold a dilutive share issue - but in that case did cop the ''unacceptable circumstances'' tag. "


Read more: http://www.theage.com.au/business/regulators-slap-family-wrist-in-a-knot-of-relationships-20110706-1h2h4.html#ixzz1RMmKQg38