SAT permits Akshya Infra to withdraw open offer

The Securities Appellate Tribunal (SAT) today directed Sebi to allow Akshya Infrastructure to withdraw open offer for acquiring stake in MARG Ltd in view of market regulator's "silence for months" in approving the draft letter of offer.

SAT has set aside Sebi's letter wherein it had declined the request of Akshya to withdraw the open offer warning the company and MARG's promoters of penal action if it did not go ahead with the offer.

In October 2011, Akshya had made open offer to the MARG shareholders so as to give them an opportunity to exit if they desired. The open offer was made to acquire 20% stake in MARG to consolidating the company's holdings.

However, due to the long lapse of time in securing Sebi's approval for the open offer the company had sought regulator's approval to withdraw the offer but that was not granted.

"In these matters, time is of the essence and it is our considered opinion that the respondent's (Sebi) silence for months together in this case would tantamount to refusal of the appellant's (Akshya Infrastructure) offer," the tribunal said in its order today.

"We fail to understand the reason behind the respondents indifference in responding to the appellant's draft letter of offer," it added saying the company was justified in its desire to withdraw the public offer.

Akshya had filed the "draft letter of offer" with Sebi along with relevant documents, in October 2011.

The company submitted to SAT that despite giving details on time to Sebi "there was no clear indication as to when the draft letter of offer would be cleared by them".

It added that in March 2012, it had sought Sebi's permission to withdraw the offer as the same had become outdated and outlived its necessity.

However, in November 2012, Sebi declined the request of Akshya to withdraw the open offer and also directed the firm to go ahead with the same after making certain changes.

The regulator had also mentioned that penal action would be initiated against the company and the promoter group for violating takeover norms including failure to go ahead with the public offer.

Following this, Akshya approached SAT to allow it to withdraw the offer without any adverse orders or directions and ask the regulator to refund Rs 17.46 crores deposited in escrow in lieu of the offer.

"The request for withdrawal by the appellant was bona fide and made owing to the fact that the time-frame prescribed for a smooth completion of the process of open offer and exit, if any, by the public shareholders at large had already lapsed and the open offer had become redundant," SAT observed.

"In the circumstances, the respondent should have considered the case of the appellant and graciously granted permission to withdraw the voluntary open offer," it added.