2001 (8) TMI 1238 - HC - Companies Law

Summary

Issues Involved:
1. Determination of the relevant date for computing the minimum offer price.
2. Interpretation of the term 'acquirer' under SEBI Regulations.
3. Applicability of public announcement requirements under SEBI Regulations.
4. Validity of SEBI and Securities Appellate Tribunal's orders.

Detailed Analysis:

1. Determination of the Relevant Date for Computing the Minimum Offer Price:
The appellants argued that the relevant date for computing the minimum offer price should be 7-7-2000, the date they acquired control over Castrol (India) Ltd. They contended that the acquisition was an unintended consequence of acquiring Burmah Castrol Plc. and that the decision to acquire control over Castrol (India) Ltd. was only made on 7-7-2000. However, the court noted that a public announcement was made on 14-3-2000, stating that BP Amoco had agreed to buy Burmah Castrol for 3 billion pounds, and this decision was agreed upon by both boards. The court held that the relevant date for determining the minimum offer price should be 14-3-2000 when the decision to acquire control was made public.

2. Interpretation of the Term 'Acquirer' under SEBI Regulations:
The appellants argued that they became 'acquirers' only on 7-7-2000 when they acquired control over Castrol (India) Ltd. They contended that the term 'acquirer' should mean a person who has already acquired shares or control. The court, however, emphasized that the definition of 'acquirer' under regulation 2(b) includes any person who "acquires or agrees to acquire shares or voting rights in the target company, or acquires or agrees to acquire control over the target company." Therefore, the term 'acquirer' also includes someone who agrees to acquire shares or control, not just those who have already acquired them.

3. Applicability of Public Announcement Requirements under SEBI Regulations:
The appellants argued that the public announcement requirement should apply only after acquiring control, not before. The court disagreed, stating that regulation 12 requires a public announcement to be made before acquiring control over the target company. Regulation 14(3) further mandates that the public announcement should be made not later than four working days after deciding on any changes that would result in the acquisition of control. The court held that the public announcement made on 14-3-2000 fulfilled this requirement, as it was made when the decision to acquire control was taken.

4. Validity of SEBI and Securities Appellate Tribunal's Orders:
The court reviewed the orders passed by SEBI and the Securities Appellate Tribunal, which held that the relevant date for determining the minimum offer price should be 14-3-2000. The court found that both SEBI and the Tribunal had correctly interpreted the SEBI Regulations and the definition of 'acquirer.' The court concluded that there was no illegality or perversity in the orders passed by SEBI and the Tribunal. Consequently, the appeal was dismissed with costs.

Conclusion:
The court upheld the orders of SEBI and the Securities Appellate Tribunal, confirming that the relevant date for computing the minimum offer price was 14-3-2000. The court emphasized the importance of the public announcement requirement under SEBI Regulations and clarified the interpretation of the term 'acquirer' to include those who agree to acquire shares or control. The appeal was dismissed, and the orders of SEBI and the Tribunal were deemed valid and proper.