S.B.SINHA, J. - (1.) THESE appeals under section 15Z of the Securities and Exchange Board of India Act, 1992 (for short, 'the said Act) arise out of a judgment and order dated 21.02.2003 passed by the Securities Appellate Tribunal, Mumbai (for short, 'the tribunal') in appeal no. 114 of 2002. BACKGROUND FACTS :
(2.) COLOUR Chem Ltd. is a target company. Its shares are listed on the Bombay Stock Exchange and National Stock Exchange. Appellant no.1 (Clariant) in civil appeal no.3183 of 2003 is a Swiss company ing subsidiary of another Swiss company, Clariant AG. Hoechst is a German company whereas Ebito Chemiebeteiligungen AG (Ebito) is a Swiss company. In Ebito, Clariant held 49% and Hoechst 51% shares. An agreement was entered into by and between Hoechst and Clariant pursuant whereto and in furtherance whereof German Specialty Chemicals business was transferred to the latter by transferring 583708 equity shares of Rs. 1007- each of the target company. On or about 21.11.1997, with a view to give effect to the said agreement, Clariant sought for an exemption from compliance of the requirements of making open offer to the shareholders of the target company in terms of the provisions of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (for short, the Regulations). Such exemption, however, was not granted. Hoechst in the aforementioned situation decided to sell off the shares held by it in the target company to Ebito, a company which was floated on 19.5.2000 as a special purpose vehicle. Actual transfer took place on 13.10.2000. Ebito by reason of the aforementioned transfer became a 100% subsidiary of Clariant. A complaint was received by the Securities and Exchange Board of India (for short, 'the Board') to the effect that as by reason of the aforementioned arrangement as 50.1% shares/voting rights and control in the target company had been made without any public announcement, the provisions of the regulations had been violated. Upon an inquiry made in this behalf, the Board came to the conclusion that the acbequirer had actually acquired the control over the target company on 21.11.1997. By reason of an order dated 16.10.2002, the Board directed : "13.1 In view of the findings made above, in exercise of the powers conferred upon me under sub-section (3) of section 4 read with section 11B SEBI Act 1992 read with regulations 44 and 45 of the said regulations, I hereby direct the acquirer to make public announcement as required under chapter III of the said regulations in terms of regulations 10 and 12 taking 21.11.97 as the reference date for calculation of offer price. The public announcement shall be made within 45 days of passing of this order. 13.2 Further, in terms of sub regulation (12) of regulation 22, the payment of consideration to the shareholders of the target company has to be made within 30 days of the closure of the offer. The maximum time period provided in the said regulations for completing the offer formalities in respect of an open offer, is 120 days from the date of public announcement. The public announcement in the instant case ought to have been made taking 21.11.97 as a reference date and thus the entire offer process would have been completed latest by 21.3.98. Since no public announcement for acquisition of shares of the target company has been made, which has adversely affected interest of shareholders of target company, it would be just and equitable to direct the acquirer to pay interest @15% per annum on the offer price, the acquirer is hereby accordingly directed to pay interest @15% per annum to the shareholders for the loss of interest caused to the shareholders from 22.3.98 till the date of actual payment of consideration for the shares to be tendered in the offer directed to be made by the acquirer." An appeal was preferred thereagainst by the acquirer wherein the primal question raised was the rate of interest for the delay involved in making payment to the shareholders who tendered the shares in the public offer required to be made in terms of the regulations.
(3.) IT is not in dispute that the value of the share as on 24.2.1998 was Rs.220/-; on 22.10.2002 Rs.213/- and on the date of public announcement i.e. on 7.4.2003 the value of the share was Rs.209/-, Rs.233/- Rs.203/- and Rs.220/-, whereas the offer price was Rs.318/-. The submissions of the acquirer before the tribunal were that (i) the rate of interest is on the higher side; (ii) the dividends having been paid in the meantime, the same should be set off from the amount of payable interest; and (iii) the interest is payable only to those shareholders who held shares on the triggering date, namely, 24.2.1998. IMPUGNED JUDGMENT:;