Compliances must prior to Herbertsons settlement: Sebi

The Securities and Exchange Board of India (Sebi) told the Supreme Court today that the settlement between Vijay Mallya and Kishore Chhabria required "some more compliance" with the consent terms approved by the court on March 7.

The court stated that if the terms are not complied with in the stipulated time, Sebi can bring it to the notice of the court at the appropriate stage.

Sebi had put certain conditions in the agreement over the shareholding of Herbertsons Ltd, to protect the interest of ordinary shareholders.

All parties had agreed to the terms. However, Sebi told the bench headed by justice Santosh Hegde that there should be "full compliance with the conditions without any omissions."

Sebi insisted on certain conditions as the purchaser must make an offer under the delisting guidelines to the remaining shareholders in accordance with reverse book-building procedure as specified in the delisting guidelines.

Once the delisting price is determined, the difference between the original offer/ competitive bid price and the delisting prices is available and if the delisting price works out higher than the open offer price, the shareholders whose shares were accepted in the open offer shall be paid the difference.

Both the above are required to be completed by registration of transfer of all concerned shares. But in case the delisting offer fails, the public shareholding in the target company, Herbertsons, should be brought up to the minimum limits specified under the listing agreement within a period of six months.