More Stories

Informist, Friday, Nov. 29, 2024

 

NEW DELHI – The Supreme Court on Friday refused to stay a Securities Appellate Tribunal's Oct. 5, 2023 order to reject INR 52.5 million penalty by the Securities and Exchange Board of India against Cairn India Ltd., now merged with Vedanta Ltd. The top court issued a notice to Vedanta and other parties on a challenge by the market regulator against the appellate tribunal order.

 

The case has its genesis from Cairn India board approving a buyback of INR 57.25 billion from the open market route, scheduled to be done between January 2014 and July 2014. However, the open market buyback did not succeed as the company bought back only 21.48% of the maximum number of buyback shares and fell short of the 50% minimum requirement under the buyback norms.

 

After investigating the matter, SEBI found that the company's orders to buy back shares on the National Stock Exchange and BSE were not adequate despite favourable liquidity. The market regulator held that the company had misled investors with regard to its announced buyback of shares. Consequently, in 2021, the market regulator passed a penalty order against the company. Challenging this, Vedanta moved the appellate tribunal.

 

Vedanta argued in the appeal that the sole reason for non-completion of the buyback was that the shares moved above the maximum buyback price of 335 rupees for 65 out of 123 trading days available during the buyback period. The appellate tribunal held that the facts did not conclusively prove that the company had shown no intent to successfully complete the buyback and set aside the market regulator's order.

 

In its appeal before the apex court, the market regulator said that the appellate tribunal failed to appreciate that the company from the initial stages of the buyback offer had not taken any substantial steps to make the same successful. The announcement of the buyback by Cairn India was misleading and designed to influence the decision of the investors and induce them to trade in the shares of the company, which was reflected in the increased trading volume after the announcement, said the market regulator.

 

Friday, shares of Vedanta Ltd. ended 0.4% higher at INR 453.50 on the National Stock Exchange.  End

 

Reported by Surya Tripathi

Edited by Deepshikha Bhardwaj

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2024. All rights reserved.