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To bring to an end the litigation over the controversy pertaining to acquisition of Hebertsons Ltd, the Securities and Exchange Board of India on Monday requested the Supreme Court to uphold its February 2002 order asking both UB Group chairman Vijay Mallya and his business rival Chhabrias to divest specified shares in the target company.
Sebi, in an affidavit, said its August 1 order asking Mallya and Chhabrias to make open offers to divest their stakes in excess of 21.38 per cent and 10 per cent shares respectively in Herbertsons Ltd, should be upheld by the Apex Court.
Appearing before a Bench comprising Chief Justice V N Khare and Justice S B Sinha, Solicitor General Kirit Raval said Sebi was not concerned with the question as to who held the reins of the target company and was interested only in securing the interest of the investors in securities.
Thereafter, the Bench adjourned the matter for further hearing to October 17 and continued its order of September 8 by which it had said that the competitive bidding for Herbertsons' shares would go on as planned but the 19.1 per cent held by the Chhabrias would be subject to its further orders.
Securities Appellate Tribunal had reversed the February Sebi order and indicted it for passing an order in the case without an adequate explanation.
The Supreme Court had on September 8 issued notice to the Sebi on a petition filed by United Breweries challenging the SAT order asking Kishore R Chhabria and Madanlal D Chhabria to make an open offer to shareholders of Herbertsons Ltd with October 27, 1994 as a reference date to calculate offer price.
The court had asked Sebi as to what would happen if it was found that the acquisition of 19.1 per cent of the shares in Herbertsons LTD by Chhabrias were void and whether there could be ex-post facto offers.
Sebi, in its affidavit, said it is in the interest of justice as also the interest of shareholders of the target company that the orders/directions issued by it should be maintained without the modifications suggested by SAT.
Pointing out that the market regulator would challenge through a separate appeal the August 1 order of SAT, Sebi said: "In the event the apex Court sustained the SAT order, all the shareholders including unregistered persons who have purchased the shares and who have sent the shares for transfer/demand before closure of the offer would be eligible to participate in the public offer and would be entitled to get interest."
As the rights attached to the shares travel with the shares, "the public offer would be required to be made to all the holders who have purchased and are owners of the shares till the closure of the public offer," Sebi said.