Sebi. (Photo: Kamlesh Pednekar)
In a 19-page order released on Friday, the tribunal pulled up Sebi
for not following the instructions it gave on this in an order dated April 13, 2016.
The issue is whether RIL
violated the listing norms while taking control of Network18.
Petitioners have alleged that RIL
took indirect control of Network18
by subscribing to the so-called zero coupon, optionally and fully convertible debentures (ZOCDs), on February 27, 2012. It has been alleged that RIL
delayed disclosing this to shareholders.
The tribunal took up the issue two years ago, when it passed an order asking Sebi
to do a fresh probe.
“While considering the approval given by Sebi
to the open offer price of NW18 (Network18), it was noticed that the open offer price was based on the clauses contained in the ZOCD Agreement dated February 27, 2012. Accordingly, this tribunal perused the clauses contained in the ZOCD agreement and arrived at a prima facie conclusion that on execution of the ZOCD Agreement, control over NW18 indirectly stood divested in favour of IMT,” said Justice J P Devadhar in the order.
asked Sebi to conduct a fresh probe and pass an order it. However, Sebi had rejected the plea of the petitioners on the grounds that the transaction did not contribute to a violation in the listing norms since the IMT was not a material subsidiary of RIL. Sebi did not pass an order in the matter but conveyed its decision to SAT
through a signed affidavit.
“Sustaining such patently erroneous decision of Sebi would be detrimental to the interests of investors in the securities market and would encourage listed companies
to acquire indirect control over other companies
through a Trust or some other entity without making disclosures under Clause 36 of the Listing Agreement,” SAT