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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 matter before SAT.
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 approval.
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 vote.
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 appeared for ITC.
Janak Dwarkadas, Navroz Seervai and Ravi Kadam appeared for JM Financial ARC and Hotel Leela and the promoters, respectively.
