At, SEBI Securities Exchange Board of India Securities Appellate Tribunal
By, CORAM: JUSTICE N.K. SODHI
By, PRESIDING OFFICER
By, SAMAR RAY
Mr. Simil Purohit, Advocate for the Appellants. Mr. Shiraz Rustomjee, Advocate with Ms. Daya Gupta Advocate for Respondent no. 1. Mr. Zal Andhyarujina, Advocate with Mr. Manu Kulkarni, Mr. Tapan Deshpande, Advocates for Respondent no. 2. Mr. Rahul Dwarkadas, Advocate with Mr. N. Mukerji, Advocate for Respondents no. 3 to 7.
N.K. Sodhi, Presiding Officer (Oral)
This order will dispose off two Appeals no. 134 of 2008 and 35 of 2009 both of which have been filed by the same appellant and raise similar questions of law and fact. Since arguments were addressed in Appeal no 134 of 2008, the facts are being noticed from this case. Challenge in this appeal is to the communication dated October 10, 2008 addressed by the Securities and Exchange Board of India (for short the Board) to appellant no. 1 through its counsel informing the latter that Hindalco Industries Limited (for short the Company) was making a rights issue through fast track mechanism and that its complaint had been forwarded to the lead merchant banker to the issue. The primary grievance of the appellant is that the company in its letter of offer to the existing shareholders had not made adequate disclosures and that some of the disclosures made therein were incorrect. The Board further informed the appellant that in case the company made inadequate disclosures in the offer documents, it would require the merchant bankers to provide adequate disclosures to the shareholders. The company had come out with a rights issue to raise further funds. An advertisement in the newspapers was published on September 19, 2008 and a letter of offer was issued to the existing shareholders even prior thereto i.e. on September 13, 2008. As per the time schedule of the issue, the applications for allotment could be received up to October 10, 2008 and it is not in dispute that the allotment was actually made on October 23, 2008. It is also common ground between the parties that the freshly allotted/issued shares were listed on the Bombay Stock Exchange and the National Stock Exchange on October 24, 2008 and that they are being traded since then.
It is obvious that they must have changed hands several times. As already noticed, the grievance of the appellant is that the company did not make adequate disclosures in the letter of offer. Even if one were to assume (though we have not examined this aspect at all) that the disclosures were inadequate, we are of the opinion that no relief can be granted to the appellant at this stage. Feeling aggrieved by the impugned communication, the appellant preferred the present appeal on October 23, 2008 and the same came up for admission on November 14, 2008. The learned counsel appearing for the appellant pressed for an interim order and wanted all further proceedings in the issue including allotment of shares to be stayed. After hearing the learned counsel for the parties, we were not inclined to grant the prayer and instead, we directed that the appeal be heard and disposed off at the admission stage. We had specifically asked the learned counsel for the appellant whether he wanted us to pass a reasoned order declining his prayer for stay and his reply was in the negative. Today, when the issue is long over and the shares have been traded in the market for the last almost a year, it is not possible to grant any relief to the appellants particularly when the shares would have changed hands several times. The appeal has, therefore, become infructuous.
We also find that the appellant has not approached this Tribunal with clean hands. Learned counsel for the appellant admits that there are serious disputes existing between the appellant and the group companies of the second respondent and that those disputes are pending in different fora including arbitration proceedings. Appellant no. 1 is not a shareholder of the company and has no genuine grievance which may have any impact on the market. The filing of the present appeal appears to be another step taken by the appellants towards their on going disputes with the group companies of respondent no. 2. We say so in view of prayer E made in the memorandum of appeal which reads as under:
E) ?Be pleased to direct Respondent No. 1 to reply to the Appellants after investigating the various non disclosures made by Aditya Birla Group Companies in their various fund raisings since 2001 and thereafter take appropriate action in accordance with law.?
The appellants want the Board to investigate all the previous fund raising issues of Aditya Birla Group Companies since the year 2001. We are in the year 2009. How can such a direction be issued and the prayer is as vague as
Please Login To View The Full Judgment!
it could be. We find that the appeal has been filed with an ulterior motive. Learned counsel appearing for the company has strenuously urged that appellant no. 2 is neither a shareholder nor a renouncee of any other shareholder and has no locus standi to maintain the appeal. Since we are dismissing the appeal as infructuous, it is not necessary for us to examine these issues on merits. In the result, the appeal fails and the same is dismissed with no order as to costs.