Arun Goenka vs Sebi

BEFORE THE SECURITIES APPELLATE TRIBUNAL MUMBAI Date of Decision: 01.11.2022 Misc. Application No. 1242 of 2022 And Appeal No. 743 of 2022 Arun Goenka 703, Meadows Sahar Plaza Complex, J.B. Nagar, Andheri (E), Mumbai- 400 059 Maharashtra ...Appellant Versus 1. Securities and Exchange Board of India, SEBI Bhavan, Plot No. C-4A, G-Block, Bandra-Kurla Complex, Bandra (East), Mumbai- 400 051 2. Aurora UK Bidco Limited 22 Grenville Street, St. Helier, Jersey, Channel Islands JE4 8PX 3. JM Financial Limited 7th Floor, Cnergy, Appasaheb Marathe Marg, Prabhadevi, Mumbai- 400 025, Maharashtra ...Respondents Mr. Ravi Prakash, Advocate for the Appellant. Mr. Pradeep Sancheti, Senior Advocate with Mr. Nishit Dhruva, Mr. Ravishekhar Pandey, Ms. Shefali Shankar and Mr. Yash Dhruva, Advocates i/b. MDP & Partners, Advocates for Respondent No. 1. Mr. Somasekhar Sundaresan, Advocate with Mr. Indranil Deshmukh, Ms. Samhita Mehra, Ms. Vaidehi Chande and Mr. Ruetviej Pandya, Advocates i/b Cyril Amarchand Mangaldas for Respondent No. 2. Mr. Gaurav Joshi, Senior Advocate with Mr. Ativ Patel, Ms. Viloma Shah, Mr. Darshit Dave and Mr. Harshad Vyas, Advocates i/b AVP Partners for Respondent No. 3. CORAM: Justice Tarun Agarwala, Presiding Officer Ms. Meera Swarup, Technical Member Per: Justice Tarun Agarwala, Presiding Officer (Oral) 1. The present appeal has been filed against the order of the General Manager of Securities and Exchange Board of India ("SEBI" for convenience) dated March 31, 2021 whereby the representation of the appellant has been rejected.

2. The appellant contents that he is the shareholder of the target company, namely, Accelya Solutions India Limited and that he is entitled for interest for the delay in the payments made by the acquirer pursuant to the offer price. 3. The facts leading to the filing of the present appeal is, that on November 15, 2019, Aurora UK Bidco Limited (acquirer) entered into a share purchase agreement pursuant to which the acquirer indirectly acquired 74.66% of the voting rights of the 3 target company thereby triggering the obligation of making an open offer under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 ("SAST Regulations" for convenience). 4. In compliance with SAST Regulations, the acquirer along with the Persons Acting in Concert (PAC) made a public announcement for an open offer to the shareholders of the target company on November 19, 2019 at a price of Rs. 956.09 per share. 5. It transpires that SEBI received certain complaints with regard to the offer price based on which SEBI appointed an independent valuer which determined the offer price as Rs. 1,030/- per equity share.

Accordingly the acquirer revised the price to Rs. 1,042.99 per share and made an open offer to the shareholders of the target company on October 05, 2020 and closed the open offer on October 16, 2020. The consideration was made on November 02, 2020 to the shareholders who tendered their shares during the open offer. 6. In September 2020 the appellant filed an appeal against the open offer determined by SEBI. Another appeal was filed in October 2020. This Tribunal by an order dated October 15, 4 2020 directed the appellants to file an appropriate representation with regard to the payment of interest on delayed payments within a week and SEBI was directed to decide the matter after giving an opportunity of hearing. 7. Pursuant to the aforesaid order of this Tribunal the appellant filed an appropriate representation which was decided by the impugned order dated March 31, 2021. 8. We have heard Shri Ravi Prakash, the learned counsel for the Appellant and Shri Pradeep Sancheti, the learned senior counsel for Respondent No. 1, Shri Somasekhar Sundaresan, the learned counsel for Respondent No. 2 and Shri Gaurav Joshi, the learned senior for Respondent No. 3. 9. The only contention which arises for consideration is, whether the appellant is entitled for payment on interest from the acquirers for the delay in making the payments to the shareholders pursuant to the offer price.

According to the appellant the interest is required to be paid up to the date of actual payments. 10. In this regard, we are of opinion that the appellant is not at all entitled to any relief whatsoever. We find that the appellant was not a shareholder of the target company as on the date of the public announcement of the open offer i.e. November 19, 2019. The appellant only acquired the shares of the target company between May and August 2020. 11. In Clariant International Ltd. And Anr. vs. SEBI (2004) 8 SCC 524 the Supreme Court held:- 12. The Supreme Court clearly held that interest is payable only to such persons who were shareholders of the target company as on the triggering date which in the instant case is November 19, 2019. Admittedly, the appellant became shareholders of the target company between May and August 2020 and therefore is not entitled for any interest in view of the aforesaid decision of the Supreme Court. 13. As a result of the aforesaid, the appeal lacks merit and is dismissed summarily. The misc. application is disposed of accordingly. 14. This order will be digitally signed by the Private Secretary on behalf of the bench and all concerned parties are directed to act on the digitally signed copy of this order.

Certified copy of this order is also available from the Registry on payment of usual charges. Justice Tarun Agarwala Presiding Officer Ms. Meera Swarup Technical Member RAJALAKS Digitally signed by HMI RAJALAKSHMI 01.11.2022 HARISH HARISH NAIR Date: 2022.11.04 PK NAIR 17:07:03 +05'30'