TMI Blog2020 (2) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... ng one of the basic mandates of SEBI, we are of the considered opinion that issues relating to continued listing, exit and valuation of shares of the ELCs cannot be treated as minor individual investor complaints by SEBI. Therefore, when substantive questions on these issues are raised by minority/public shareholders SEBI shall examine those issues and pass a reasoned order. This is not done in the instant matter. We also note that SEBI has delegated lot of responsibility to the stock exchange(s) which also does not seem to have discharged any responsibility assigned to them in terms of the various Circulars issued by SEBI. What appears on record is that the company prepared a plan of exit, got a valuation done and provided an exit option. No authority seems to have discharged any of their responsibilities including monitoring. Set aside the order/communication dated September 20, 2017 passed by SEBI and in the interest of justice we direct SEBI to pass a reasoned order in the matter. The said order shall also address the issue relating to the stand of SEBI on the need for the ELCs to make a serious effort in continued listing and the procedure and monitoring of their endeavour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fail to obtain listing on any other stock exchange, will be moved to the dissemination board (DB) by the exiting stock exchange. Therefore, in the interest of investors of ELCs a mechanism of dissemination board have been set-up by stock exchanges having nationwide trading terminals. Citing the relevant part of the May 22, 2014 Circular, it was further argued that the nationwide stock exchanges wherein such ELCs have migrated to during the transition should facilitate listing of such companies on a priority basis and on a light touch regulation approved by SEBI for listing ELCs including exemptions from the Takeover Code. With regard to providing exit to investors, in case of failure to get the company listed, specific procedure was provided in the Circular dated October 10, 2016 which inter alia states as follows:- The oversight and monitoring of such exit mechanism shall be carried out by the designated stock exchanges. Designated stock exchanges shall further ensure that the promoters have made adequate efforts in terms of the above provisions for providing exit to their shareholders before removing ELCs from the DB. The designated stock exchange shall display the list of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). Given the mandate of investor protection, such an approach adopted by SEBI as a Regulator is completely untenable. In support of the appellants' contention the learned counsel also relied on the order of this Tribunal in Pawan Kumar Saraf v. SEBI [Appeal No. 183 of 2018 decided on 19.09.2019] which in para 6 clearly held that SEBI cannot be oblivious to how the offered price was arrived at. 6. Learned counsel Shri Anubhav Ghosh, appearing for Respondent No. 1 SEBI and Respondent No. 12 BSE Limited, submitted that it was never mandatory for ELCs to seek listing in national level stock exchanges; what is mandatory is either to seek listing or to provide exit. At a later stage, even a third option was provided that of compulsory delisting. The learned counsel also relied on the orders of the Hon'ble Supreme Court in Pardeep Aggarbatti, Ludhiana v. State of Punjab 1998 taxmann.com 1660 and Gujarat Urja Vikas Nigam Ltd. v. Essar Power Ltd. [2008] 4 SCC 755 on the issue of interpretation of statutes and thereby the meaning of shall by invoking the chapter on exceptional construction as well as principle of noscitur a sociis. 7. On valuation issue, the learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tone and tenor of the Circulars relating to the same issued by SEBI on various dates mandate at least a serious endeavour from the side of the company to get listed failing which they have the option of voluntary delisting, failing even which getting compulsorily delisted. That is why SEBI's Circular dated May 30, 2012 elaborately prescribed a light touch approach to eligibility criteria etc. for listing such ELCs and directed the stock exchanges to monitor the progress further. By the October 10, 2016 Circular such ELCs were given exemption from some of the provisions of ICDR for raising capital. Therefore in the light of these directions and its tone and tenor it is clear that listing is the first option and only in the event of failing to get listed an exit option should be adopted. Further, the guidelines relating to the exit option as provided under the October 10, 2016 Circular at 'Annexure A' lists a number of obligations cast upon the designated stock exchanges as well as on the management of the company to discharge. Nothing on record has been brought before us whether all these steps have been followed or monitored by the concerned stock exchange. What is pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
