Sebi disposes of adjudication proceedings against Dalmias

Regulator Sebi has disposed of adjudication proceedings against Dalmias in the case of alleged violation of the Takeover Code in a share buy-back scheme of their flagship company OCL Limited The Securities Appellate Tribunal (SAT) had in November last year set aside an earlier order of the Securities and Exchange Board of India which held that Dalmia's had violated the Takeover code as it has not come with a public announcement."... since the present adjudication proceedings were initiated against the Noticees ( Raghu Hari Dalmia and 20 other entities) consequent to the direction of whole-time member vide his order dated January 28, 2010, and the said order is set aside by SAT by its order dated November 21, 2011... the adjudication proceedings initiated against the Noticees are infructuous and therefore, cannot be proceeded with."The matter is, accordingly, disposed of," Sebi said in an order issued yesterday.Dalmias had 62.56% share in OCL. After the buy- back of 11,83,708 shares in 2003, the shareholding went up to 75%.The issue came up three years after the closure of the buy-back offer. A company called Jindal Securities had filed a petition before the Delhi High Court alleging the promoters had triggered the Takeover Code through such passive acquisition.Sebi regulations mandated for a public announcement for acquisition of more than 15% shares as per the then existing rules.The high court directed Sebi to look into the issue, following which the market regulator had issued notice to the Dalmias in July 2007.Sebi had also started adjudication process against Dalmias.The promoters had submitted before Sebi that they had not acquired any additional share or voting right in OCL and, therefore, Takeover Code cannot be initiated.Sebi was not convinced with it and in a 2010 order held that Takeover Code was violated.Dalmia's had later filed a petition before SAT against the Sebi order.In November last year, SAT set aside the order passed by Sebi. The tribunal observed that as the Dalmias already had a majority holding in OCL, such acquisition of share did not attract the provisions of the Takeover Code.