2009 (8) TMI 1222 - AT - Companies Law

Summary

Issues involved:
Challenge to communication u/s Regulation 3(2) of the takeover code regarding issuance of Global Depository Receipts by Indian listed companies and applicability of takeover code.

Comprehensive details:
1. The appeal challenges a communication issued by the general manager of the Corporation Finance Department in response to a request by Bharti Airtel Limited seeking informal guidance on the issuance of Global Depository Receipts (GDRs) by Indian listed companies and the applicability of Regulation 3(2) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.
2. Bharti proposed a partnership with MTN Group Limited involving the issuance of GDRs by Bharti to MTN and its shareholders. The proposal includes acquiring 49% shares of MTN by Bharti. The communication clarified that MTN and its shareholders would need to comply with the takeover code only upon conversion of GDRs into equity shares with voting rights.
3. The appellant, holding 100 shares of Bharti, felt aggrieved by the communication, arguing it contradicted the takeover code and could affect shareholders' rights. The respondents contended the appeal was premature as the proposal was not finalized, and the communication was interpretative, not an order.
4. The Tribunal found the appeal premature as the proposal was pending finalization. The communication was interpretative and not binding on the Board. The Tribunal emphasized that no final decision adversely affecting shareholders had been made.
5. Regarding the appellant's bonafides, the Tribunal agreed with Respondents 2 and 3 that they were suspect. The appellant's timing of acquiring shares raised doubts about the motive behind the appeal. The Tribunal declined to entertain the appeal based on these grounds.
6. The appellant's grievance about the Board not considering a representation was dismissed as the Board had not passed any order on it. The Tribunal clarified that appeals could only be made against orders, not inaction. As the appellant did not request a direction for the Board to address the representation, the Tribunal could not entertain this argument.

In conclusion, the appeal was deemed not maintainable, and the parties were left to bear their own costs.