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TMI Blog2020 (2) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... Target Company/FMGL') by appellant Tenneco Inc (hereinafter referred to as 'Tenneco') arising out of open offer for acquisition of 25.02%. 3. The Target Company is the subsidiary of erstwhile Federal Mogul Holding Ltd. (referred to hereinafter as 'FMHL') and Federal Mogul Vermogensverwaltungs GMBH (referred to hereinafter as 'FMVG'). FMGL has merged into appellant Tenneco which is a public limited corporation based in USA on 1st October, 2018. In the circumstances, the holding in FMHL being 60.05 percent and FMVG being 14.93 percent in the Target Company it stood transferred to the appellant Tenneco. The Target Company's 25.2% of the shares from various shareholders in India was therefore required to be valued for making an open offer under the provisions of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations 2011 (hereinafter referred to as 'SAST Regulations). The shares of the 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-reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g independent Chartered Accountant by respondent SEBI is not required, the respondent SEBI ought to have given an opportunity to the appellant before revising the offer price by providing material on the basis of which Haribhakti had arrived at different valuation. Then respondent SEBI should have taken decision by recording brief reasons upon consideration of the objections, if any, received from the appellant to the valuation arrived at by Haribhakti. 11. In the circumstance, in view of the above fact there is no need to consider the plea of Mr. Mohan Krishnaswamy, the appellant in Appeal No.182 of 2019 and counter submissions of the appellant. In the circumstances, we pass the following order. 1. The appeal no.108 of 2019 is hereby allowed with no order as to costs. 2. The impugned observation/direction is hereby set aside. 3. The case is remitted back to the respondent SEBI. Since the appellant has now received 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. Chandr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remarks of Haribhakti. The response of Haribhakti however was received by respondent SEBI after the meeting/hearing took place and, thus, no opportunity to file objections to the response of Haribhakti was given. Thus, respondent SEBI has abdicated its jurisdiction by outsourcing the objection raised by the appellant. There is non application of mind as regards the directions of this Tribunal. Alternatively, the learned counsel took us through the valuation report of MKSA and Jhaveri as also the valuation report of Haribhakti to show that Haribhakti's report is flawed being against the Regulations as well as the decisions of Supreme Court and High Courts etc. He therefore submitted that the appeal be allowed, the impugned decisions be quashed and it should be held that the valuation of shares of Rs. 400 is a fair valuation. 13. Appellant Chandra Prakash Tripathi and Bhavook Tripathi on the other hand for reasons forwarded by them contended that the fair price is required to be arrived at Rs. 820 per share and at Rs. 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 appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he argument. 5. On the other hand, counsel for the Respondent SEBI and other appellants submitted that data of Bosch and WABCO is also required to be considered as the target company had also patented technology like that of Bosch and WABCO India Ltd. 6. Having heard all the parties and upon appreciating the ratio of Sultania and Cadbury cited above, according to us, after remand of the matter to the respondent SEBI had rightly obtained the response of the appellant. It has also examined the submission of the intervener i.e. present appellant Chandra Prakash Tripathi. It also sought response from Haribhakti and thereafter made the observation vide the impugned direction. 7. The objection of the appellant that respondent SEBI has merely cut and paste the observation of Haribhakti after the hearing was concluded, though appears to be attractive, the same will have to be repelled 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 weightag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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