IN THE MATTER OF STERLITE INDUSTRIES (INDIA) LIMITED AS PER HON’BLE DELHI HIGH COURT’S ORDER DATED OCTOBER 29, 2003 IN CWP No. 6884/2003 – SANJAY KUMAR SONI & Anr. Vs UNION OF INDIA & Ors.
Securities and Exchange Board of India (SEBI) has passed an order dated January 27, 2005 pursuant to the Hon’ble High Court of Delhi’s direction in C W P 6884 of 2003, disposing of the complaint dated August 27, 2003 lodged by Shri Sanjay Soni and Shri Sumeet Soni with SEBI. It is held that there has been no violation of SEBI’s order dated October 28, 1998 and hence no further proceedings are warranted in the case of payment made by Sterlite Industries (India) Ltd. (SIIL) to the shareholders of Indian Aluminum Co. Ltd. (Indal).
Earlier, SEBI vide order dated October 28, 1998 had directed SIIL to make payment of Rs. 221/- in cash along with the interest @ 15% from July 02, 1998 i.e., the date by which payment ought to have been made to the shareholders of Indal who had tendered the shares in the open offer made by SIIL in 1998 under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. Pursuant to the passing of the order of SEBI, SIIL went in appeal to Appellate Authority in the Government of India which upheld SEBI order. On further appeal to Hon’ble High Court of Delhi, SEBI’s order was upheld subject to certain modification.
SIIL on September 24, 2002 made the final payment to the eligible shareholders of Indal in terms of SEBI’s order and subsequent directions by the courts. However, while making the said payment, dividends declared (Rs.19.50 per share) by Indal on or after July 02, 1998 were deducted.
SEBI received a complaint dated August 08, 2003 from Shri Sanjay Soni and Shri Sumeet Soni to direct SIIL to pay all the shareholders of Indal the said sum of Rs. 19.50 per share with interest from September 26, 2002 till the date of payment.
They filed a writ petition filed in the Hon’ble Delhi High Court by them (CWP No. 6884/2003 - Sanjay Kumar Soni and Ors Vs UOI). While disposing the PIL, the Delhi High Court vide its Order dated October 29, 2003 held that it had no jurisdiction and that the matter did not involve public interest. The Hon’ble Court directed SEBI to examine the letter dated August 27, 2003 and to record a finding.
SEBI considered that while making the payment SIIL deducted the amount of dividend already paid by Indal on the shares held by the shareholders, since the shares had continued to remain in the name of the shareholders and could not be transferred to the acquirers for the interim period due to protracted litigation. SIIL paid interest to eligible Indal shareholders for the said period thereby complying with SEBI’s direction and Hon’ble High Court’s order. This also resulted in SIIL being entitled to ownership of the said shares during the interim period for which shareholders were compensated for loss of interest, entitling SIIL to the receipt of the benefits accrued on the said shares during the said period.
Based on the Hon’ble Supreme Court’s decision in Clariant International Ltd. and after thorough deliberation and examining the letter dated August 27, 2003, SEBI held that SIIL has complied with the order dated October 28, 1998 and the subsequent modification of the same vide order dated May 31, 2002 by the Hon’ble High Court of Delhi in Civil Petition No. 1598/99.
The full text of the order is available on our website: www.sebi.gov.in
Mumbai
February 02, 2005