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ARTICLE · 15 NOVEMBER 2023

Tracker: SAT's Ruling In G.R.K Reddy V. SEBI: Setting Precedent For Regulatory Diligence

The sequence of events began with Akshaya Infrastructure Ltd. ("Akshaya") making a public announcement on October 20, 2011...

IndiaMedia, Telecoms, IT, Entertainment

On October 17, the Securities Appellate Tribunal ("SAT"), passed an order in the matter of G.R.K Reddy v. SEBI, which held that (i) the issuance of direction by SEBI to make an open offer at the belated stage, without considering factors contemplated under Regulations 44 and 45 of the (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 ("SAST Regulations"), is arbitrary; (ii) the penalty under Section 15HB cannot be imposed for enforcement of an order of the Whole time Member ("WTM") passed under Section 11 and 11B of the SEBI Act, 1992 ("SEBI Act"). Additionally, SAT reduced the quantum of penalty to Rs 40 Lakhs.

Background

The sequence of events began with Akshaya Infrastructure Ltd. ("Akshaya") making a public announcement on October 20, 2011, declaring a voluntary open offer to acquire 76,51,572 equity shares of M/s. MARG Ltd. at a price of Rs. 91 per share, entailing an acquisition cost of approximately Rs. 69.62 crore.

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The contents of this article should not be construed as legal opinion. Recipients should take independent legal advice before acting on any views expressed herein. The comments in the article are as of the laws prevalent on the date the article was originally published. The views stated in the article are not binding on any authority or court, and so, no assurance is given that a position contrary to that expressed herein will not be asserted by any regulatory authority/courts. For any further queries or follow up, please contact Finsec Law Advisors.

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