TMI Blog2020 (2) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... are required to be considered, the weightage to be given to each of the parameters may depend upon the facts and circumstances of each of the case, we do not find any defect in the approach of SEBI. For the similar reason the objection of Mr. Chandra Prakash Tripathi and Bhavook Tripathi will have to be rejected. The control of Indian Company cannot be transferred without completion of the open offer process or without deposit of 100% funds required for the open offer in an escrow account. This issue is also beyond the scope of the present appeal. Appellant Bhavook Tripathi would be at liberty to raise the same issue before the respondent SEBI. If such an application is filed before SEBI, the same will be disposed off expeditiously in accordance with law. The acquirer had deposited 25% of the consideration under the open offer in terms of Regulation 17 of the SAST Regulations, 2011. Since the offer price has now increased to ₹ 608.46, the acquirer is required to make good the deficiency. However considering the fact that on account of dispute being raised by the acquirer and others, the consideration towards the offer price is still being enjoyed by the acquirer. Thu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Target Company are infrequently traded in the stock exchanges and, therefore, the valuation of the shares are required to be made as per sub-Regulation 8(2) (e) of the SAST Regulations which reads as under:- 2. Sub-regulation 8(2)(e) provides as under:- (e) where the shares are not frequently traded, the price determined by the acquirer and the manager to the open offer taking into account valuation parameters including, book value, comparable trading multiples, and such other parameters as are customary for valuation of shares of such companies; and 4. Accordingly, appellant Tenneco had appointed two valuers namely MSKA Associates (MSKA) and J.D. Jhaveri Associates (Jhaveri). These valuers determined the fair value per share at ₹ 372.10/- and ₹ 397.66/- respectively. The appellant rounded up the value to ₹ 400 per share as a fair price and public announcement was made. Draft letter of offer as per the SAST Regulations was filed with SEBI on 16th October, 2018. 5. Respondent SEBI invoking it's powers from Regulation 8 and more particularly sub Regulation (16) of Regulation 8 of the SAST Regulations appointed another Chartered Accountant M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived the valuation report of Haribhakti and other documents during the pendency of the appeal it would be at liberty to raise objections to the report before the respondent SEBI, within a period of three weeks from the date of this order. 4. The appellant Mr. Chandrakant Tripathi and the intervener Mr. Mohan Krishnaswamy would be at liberty to make written representation to the respondent SEBI within the same period. 5. The respondent SEBI thereafter shall take an appropriate decision after considering the objections, if any, of the appellants or intervener within a period of four weeks. 8. After remittal of the matter, the appellant made submission/representation before the respondent SEBI dated 6th June, 2019. Respondent SEBI also held a meeting with the representative of appellant Tenneco on 20th June, 2019 in order to give an opportunity to explain the objection on the valuation report of Haribhakti. Additionally, more written submission were made by the appellant hereinabove vide letter dated 25th June, 2019. The impugned order states that respondent SEBI also examined the representations of the interveners. 9. It appears from the record that respondent SEBI forwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other hand for reasons forwarded by them contended that the fair price is required to be arrived at ₹ 820 per share and at ₹ 1877 respectively. 14. Upon hearing both the sides, in our view all the appeals are liable to be dismissed for the reasons to follow:- Reasons 1. Though appellant Tenneco and respondent SEBI are at loggerheads on the issue of valuation of shares there is atleast an agreement and rightly so, that the valuation of shares of a Company is not a precise science. The conclusion arrived by expert valuer would be subjective and depend upon individual exercise. In the circumstances, there cannot be any indisputable single value. (Para 17 of the copy of the submissions of appellant Tenneco to respondent SEBI dated 6th June, 2019 Exhibit 16). The Target Company is a going concern but it's shares are infrequently traded. In the circumstances, sub Regulation 8(2)(e) of the SAST Regulation as quoted above provides a guideline for valuation of the shares which is already referred above. The valuation has to be carried out by taking into account valuation parameters including (1) book value (2) comparable trading multiples and (3) such other parame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pelled for the reasons that Haribhakti has not given any fresh response, but had merely relied on its earlier report. 8. In the case of Sultania as well and in Cadbury it had been observed that the valuation being not a precise science and though all the parameters are required to be considered, the weightage to be given to each of the parameters may depend upon the facts and circumstances of each of the case, we do not find any defect in the approach of SEBI. 9. For the similar reason the objection of Mr. Chandra Prakash Tripathi and Bhavook Tripathi will have to be rejected. 10. Mr. Bhavook Tripathi had submitted before us the alleged systematic oppression of the minority shareholders and mis-management of the Target Company in order to create false negative picture of the Target Company. However, the issue is beyond the scope and jurisdiction of this Tribunal. 11. In Appeal Lodging No.458 of 2019 Mr. Bhavook Tripathi claims that as per Regulation 22 of the SAST Regulations, the control of Indian Company cannot be transferred without completion of the open offer process or without deposit of 100% funds required for the open offer in an escrow account. This issue is al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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