Xchanging Technology Services India settles case with markets regulator


Xchanging Technology Services India on Tuesday settled with Sebi a case of alleged violation of takeover norms in relation to XChanging Solutions Ltd after paying Rs 65.24 lakh as settlement charges.

The settlement order came after the company filed an application with the regulator proposing to settle the matter without admitting and denying the alleged violations.

According to the three-page order, the applicant also agreed to pay the differential amount in case there is an adverse outcome related to an appeal pending before the Securities Appellate Tribunal (SAT).

In May 2016, a merger agreement was entered into between Hewlett Packard Enterprise (HPE), Computer Sciences Corporation (CSC) and DXC Technology Company. The transactions contemplated under the agreement were completed in April 2017.

Under the agreement, CSC merged with a wholly-owned subsidiary of DXC resulting in DXC becoming the parent company of CSC.

CSC is the parent company of XChanging Solutions and owned 78.77 per cent of the voting share capital. Thus, DXC through CSC indirectly acquired 78.77 per cent of the voting share capital of the target company.

The public announcement required to be made in May 2016 by the applicant as the acquirer (along with DXC and CSC as persons acting in concert) was done only in November 2017, as per Sebi.

After the open offer, the shareholding of the promoter and the promoter group, including the applicant, in XChanging Solutions rose to 90.8 per cent. This was in violation of Minimum Public Shareholding (MPS) requirement and the same was complied with a delay.

Pursuant to the settlement application, the applicant informed Sebi's internal committee that there is an appeal pending in the SAT. It was filed by an investor, mainly contesting the issue of open offer price.

The applicant proposed the revised settlement terms and "undertook to pay the differential settlement amount in the event the outcome of appeal filed in not in favour of the applicant and if the offer price as contested in the said appeal is enhanced, subject to outcome of any further litigation to settle the defaults...," it noted.

The applicant remitted the settlement amount and undertook to pay the differential settlement amount, if any, in case of adverse outcome of the appeal filed in the tribunal following which the regulator disposed of the case.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel