Shareholder of DHFL moves Bombay High Court, seeks stay on delisting

The Bombay High Court (HC) has admitted a petition from a small shareholder of Dewan Housing Finance Corpora­tion (DHFL) who has sought a stay on the delisting of the company’s shares from the stock exchanges. After its acquisition, Piramal Group plans to merge DHFL with its financial services business, while pegging DHFL’s equity value at zero.
 
The HC has sent notices to all the parties and will hear the case at the end of April.
 
The shareholder, one Punit Nangalia, submitted to the court that in course of usual delisting of shares of a listed entity, the offer price for exit to existing shareholders is to be determined through book building. The regulation further provides that the floor price will be determined in terms of the Takeover Regulations.

 

The regulations of Sebi provide that the open offer for acquiring shares will be made by the acquirer according to various parameters and formulae to arrive at the most competitive prices whi­ch will be given in an open offer to all shareholders to benefit small shareholders.
 
But this was not done in the case of DHFL acquisition and the small shareholders are being punished by the aut­horities for no fault of th­eirs by being zero valuation. The petition is also challenging the insolvency code, whi­ch does give any valuation to small shareholders.