SANJIB BANERJEE,J. - (1.) The Court : The application is by the Securities and Exchange Board of India, bitterly complaining of Clause 3.3 included in a scheme of arrangement and amalgamation sanctioned by this Court by an order of April 17, 2013.
(2.) SEBI asserts that the relevant clause and the parking of a substantial percentage of the shares in the amalgamated company in a purported trust was in clear violation of the Securities Contracts (Regulation) Rules and Rules and Orders made under the Securities and Exchange Board of India Act , 1992. In short, the grievance is that as a result of substantial shares in the amalgamated company being parked with the purported trust, the public shareholding in the amalgamated company, which is a listed public company, has stood reduced to 4.32% of its paid-up capital. According to SEBI, the public holding of shares in any listed company may not go below 25% of its paid-up capital.
(3.) The amalgamated company seeks to justify the clause on the basis of the special circumstances that resulted in India Power Corporation Limited holding approximately 93% of the shares in Dishergarh Power Supply Company Limited immediately prior to IPC L merging in DPSCL and the amalgamated company being re-christened IPC L after the transferor company. According to the amalgamated company, 57.18% of the paid-up capital in DPSCL was held by government companies and like bodies, including Life Insurance Corporation, United India Assurance and the like. One Descon Limited held 32.31% of the paid-up capital in DPSCL while IPC L held a meagre 1.71% and others held the balance 8.80% thereof. At the relevant point of time, the 57.18% shares held by government companies and like public bodies were treated as the promoters' shareholding and the balance, including Descon's and IPC L's, were regarded as public shareholding.;