2001 (4) TMI 956 - AT - SEBI

Summary

Issues Involved:
1. Relevant date for determining the minimum offer price.
2. Interpretation of "acquirer" and "control" under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.
3. Conditional public announcements and their legal implications.
4. Allegations of discriminatory treatment by the Securities and Exchange Board of India (SEBI).

Detailed Analysis:

1. Relevant Date for Determining the Minimum Offer Price:
The central issue was the determination of the relevant date for calculating the minimum offer price for the shares of Castrol India Ltd. The appellants argued that the relevant date should be 7.7.2000, the date when the acquisition of Burmah Castrol Plc became unconditional. They contended that the public announcement on 14.3.2000 was conditional and did not constitute a definitive acquisition. However, the respondent (SEBI) held that the relevant date should be 14.3.2000, the date of the initial public announcement of the offer to acquire Burmah Castrol Plc. The tribunal upheld SEBI's view, stating that the obligation to issue a public announcement arises when the acquirer agrees to acquire shares or control, not upon the completion of the acquisition.

2. Interpretation of "Acquirer" and "Control" under the Regulations:
The tribunal examined the definitions and requirements under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. It highlighted that an "acquirer" includes any person who directly or indirectly acquires or agrees to acquire shares or control over the target company. The tribunal emphasized that the regulations mandate a public announcement before the acquisition is completed, thereby ensuring transparency and protecting shareholders' interests. The tribunal concluded that the appellants became "acquirers" on 14.3.2000 when they announced their intention to acquire Burmah Castrol Plc, which indirectly included control over Castrol India Ltd.

3. Conditional Public Announcements and Their Legal Implications:
The appellants argued that the public announcement on 14.3.2000 was merely an expression of intent and conditional upon regulatory approvals, thus not constituting a definitive acquisition. However, the tribunal rejected this argument, stating that the regulations recognize conditional offers and require public announcements to be made when the acquirer agrees to acquire shares or control, even if subject to conditions. The tribunal noted that the appellants could have made a conditional public announcement for Castrol India Ltd, subject to the acquisition of Burmah Castrol Plc, and utilized regulation 27 to withdraw the offer if the conditions were not met.

4. Allegations of Discriminatory Treatment by SEBI:
The appellants alleged that SEBI treated their case differently from a similar case involving Unilever Plc's acquisition of Best Foods. The tribunal, however, found the facts of the two cases distinguishable and concluded that SEBI's actions were consistent with the regulations. The tribunal noted that the regulatory framework aims to ensure fair and equal treatment of all shareholders and that the appellants' case did not warrant different treatment.

Conclusion:
The tribunal upheld SEBI's order, determining that the relevant date for calculating the minimum offer price for Castrol India Ltd's shares was 14.3.2000. The appeal was dismissed, and the tribunal emphasized the importance of adhering to the regulatory framework to ensure transparency and protect shareholders' interests.