UNITED BREWERIES HOLDINGS LIMITED Vs. CHAIRMAN SECURITIES AND EXCHANGE BOARD OF INDIA
LAWS(SB)-2003-9-43
SECURITIES APPELLATE TRIBUNAL
Decided on September 01,2003

Appellant
VERSUS
Respondents

JUDGEMENT

- (1.) THE Applicants above mentioned, have filed the two Miscellaneous Applications (Review Applications.). THE Applications are identical in substance. THEse are against the common order passed by this Tribunal on 1.8.2003 in Appeal No. 13 and in Appeal No. 14. THE Applicants have also filed separate identical Applications ( No. 96/2003 and No. 98/2003) seeking interim order staying the operation of the Tribunal's order dated 1.8.2003 pending the hearing and final disposal of their Applications. THEse Applications were filed in the Tribunal on 11.8.2003. THE Appellants above mentioned filed affidavit in reply to the Review Applications on 21.8.2003. According to the Appellants these reply affidavits were filed "only for a limited purpose viz. to point out that the review petition filed by the Applicants is not maintainable and that they are not entitled to any interim relief as sought for or otherwise. Identical affidavits dated 25.8.2003 captioned "Limited Affidavit in rejoinder...." made by the Company Secretary of the Applicant United Breweries Holdings Ltd and Reply Affidavit thereto also dated 25.8.2003, from the Appellants were tendered by the respective counsel for the parties at the time of hearing on 25.8.2003.
(2.) The background of filing of the present Review Applications briefly is as follows: The Respondent SEBI had passed a common order on 19.2.2002 holding that the Appellants had acquired shares in Herbertsons Ltd., (Target Company) without complying with certain requirements under the listing agreement between the Target Company and the stock exchanges (the Listing Agreement) and certain provisions of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1994 (the 1994 Regulations)/Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (the 1997 Regulations). By the said order the Appellant in appeal No. 13/2002 and the Appellant in appeal No. 14/2002 and "the persons acted in concert with them" were directed to:- * Disinvest shares in the Target Company acquired in violation of the Listing Agreement and the 1994 Regulations (i.e. beyond the then existing threshold limit of 10%) through an offer for sale to public in terms of an offer document, subject to the following: (a) that for the purpose the Appellants appoint a registered merchant banker (b) that the offer price shall be at the face value of the shares as on the date of the impugned order or the lowest price at which these shares were acquired, whichever is lower (c) that the offer for sale shall be for a minimum number of shares so as to reduce the shareholding of the Appellants and persons acted in concert with them in the Target company, to less than 10% (d) that the offer document for the purpose shall be filed with SEBI within 3 months from the date of the impugned order. * Adjudication against the Appellants and persons acted in concert with them, under section 15A and 15H of the SEBI Act, was also ordered. The Appellants challenged the said common order by filing two appeals (Appeal No. 13/2002 and 14/2002) in the Tribunal. The Tribunal disposed of those appeals vide its order dated 1.8.2003. The Tribunal, for the reasons stated in the order directed the Appellants to make public announcement to acquire the shares of the Target Company as per the regulations within 3 months from the date of the Tribunal's order, taking 27.10.1994 as the referral date for the purpose of calculation of offer price and also to pay interest @15% per annum from 24.2.1995 till the date of actual payment to those persons who were holding shares of the Target Company as on 25.1.1995 and continue to be shareholders and eligible to participate in the public offer to be made in terms of the Tribunal's direction, for the shares held in their name on 25.1.1994 tendered and accepted in the public offer. The Respondent's order dated 19.2.2002 was modified to the said extent. It is against the Tribunal's said order the present Review Applications have been filed.
(3.) IN the Review Applications the Applicants have sought the following reliefs: (a) that the decision of the Tribunal dated 1.8.2003 in Appeal No. 13/2002 and 14/2002 be reviewed and the directions given in paragraph 14.3.1 (modified) of the Respondent's order dated 19.2.2002 be substituted by the following: "(i) The Appellants are directed to disinvest the 19.71% shares of the Target Company acquired in breach of regulation 10(2) of the 1994 Regulations through IMFA, Mahameru and Shirish; (ii) The mode of disinvestments of the said 19.71% acquisition shall be by the expedient of an offer for sale in the ratio of approximately 9 shares for every 10 shares held in the Target Company only to the existing shareholder of the Target Company, other than the Chhabria Group, the Mallya Group and the Plaintiffs in the Bombay High Court Suit No. 3910 of 1997, at the face value of Rs.10/- each. (b) that the decision dated 1.8.2003 be reviewed and reconsidered to hold that the alleged creeping acquisitions of 2.14% by Imfa, Beethoven and Darrel are in continuation of the illegal acquisitions of 19.71%, and are also illegal acquisition requiring disinvestments in the manner provided in prayer (a) above; (c) in the alternative to prayers (a) and (b) above, that the decision of the Tribunal dated 1.8. 2003 in Appeal No. 13/2002 and Appeal No. 14/2002 be reviewed and it be clarified that if there has to be an ex-post facto public announcement and offer by the Appellants (as directed) - which should not be the case for reasons stated in the Applications - such announcement and offer must necessarily include the "disputed shares" and also cannot exclude the provision of competitive bids under regulation 23 of the 1994 regulations/ regulation 25 of the 1997 Regulations.;


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