The Supreme Court on Friday issued notice to Securities and Exchange Board of India and others on a plea seeking to restrain the market regulator from giving nod to Indo Gulf Industries' (IGI) initial public offer (IPO).
Investment company Integeral Finvest (P) Ltd (IFPL) had sought a direction to Sebi to withdraw or withhold the publication of IGI's public offer on the ground that it was contrary to Sebi Act, 1992 and Sebi (Substantial Acquistion of Shares and Takeover) Regulation, 1996.
A bench comprising Justice SH Kapadia and Justice B Sudershan Reddy issued notice to Sebi, Enam Financial Consultants, IGI and its chairman cum managing director SK Garg and Balrampur Chini Mills on IFPL's petition seeking to restrain Garg from divesting IGI's shareholding to Balrampur Chini Mills.
According to the petitioner, Sebi was duty bound to exercise its powers and take appropriate measures under the Act to prevent illegal acquistion of shares and takeover of control and management of the listed company.
While seeking to restrain anyone from dealing with IGI's shares, which is the subject matter of arbitration, it said the same was "issued surreptitiously and fraudulently."
{{/usCountry}}While seeking to restrain anyone from dealing with IGI's shares, which is the subject matter of arbitration, it said the same was "issued surreptitiously and fraudulently."
{{/usCountry}}Sebi had been independently and exclusively entrusted with the task to regulate the security market and was duty bound to take steps to prevent any illegal transaction in the securities, it said.
According to Integeral Finvest, despite being fully aware of IGI's illegal activities and the status quo order issued by the Delhi High Court on transfer of its shares, the market regulator failed to exercise its powers and did not withold the acquistion of shares and takeover of control and management.