INSUBCONTINENT EXCLUSIVE:
Mumbai: The Securities Appellate Tribunal (SAT) on Wednesday refused to stay the postal ballot of Hotel Leela Venture seeking fresh
shareholder approval for its sale of assets to Brookfield.
Aggrieved by Sebi’s recent order asking Hotel Leela to conduct a
shareholders’ vote, tobacco-to-hotels major ITC, which holds 7.92 per cent in the indebted hospitality chain, had moved SAT seeking a stay
on the postal ballot or keeping the final outcome of the votes on hold till the tribunal hears the order.
“The SAT said it will hear and
finally dispose of the matter before September 18, the date of announcement of the (postal ballot) results
If it appears that it would go beyond that date, interim relief would be considered at that stage,” said the lawyer appearing for the
The tribunal has posted the matter for further hearing on August 29.
Hotel Leela Venture while declaring its June quarter results said,
voting will begin on August 18 and will end on September 16
The company said it will declare the results of the postal ballot on September 18.
Last month, Sebi had asked Hotel Leela Venture to provide
all relevant details of the sale transaction between it and Brookfield to shareholders for their nod.
The company will also have to disclose
the details of valuation of both the asset sale transaction and additional intellectual property transaction to shareholders for their
The regulator said during the course of the postal ballot, the valuation reports should be kept for inspection by the shareholders of Hotel
Leela Venture.
Besides, the asset sale transaction of the company along with the intellectual property transaction of the promoters and its
affiliates should be put to vote before shareholders, afresh
The promoters and promoter group of Hotel Leela Venture should not participate in the voting process, Sebi had said.
ITC challenged the Sebi
order that held that the portion of the proposed sale transaction by Leela Venture involving pay outs to promoters and to JM Financial ARC
can be segregated.
“ITC has argued that under LODR (Listing Obligations and Disclosure Requirements) Regulations, related parties cannot
Both the promoters and JM Financial ARC stand to gain enormously by receipts of large amounts in concurrent transactions which are
contracted as a composite and integrated transaction,” the counsel for ITC argued before the tribunal.
The regulator had also held that JM
Financial ARC violated the takeover code
However, JM Financial ARC is yet to challenge that part of the order.
ITC has argued that since takeover regulations violations stand
established, the voting rights on such shares should not be exercised.
Senior lawyers Darius Khambata, Pesi Modi and Somasekhar Sundaresaran
Janak Dwarkadas, Navroz Seervai and Ravi Kadam appeared for JM Financial ARC and Hotel Leela and the promoters, respectively.
