The Bombay High Court has directed the Securities and Exchange Board of
India (Sebi), to investigate the preferential allotment case involving
Sesa Industries Ltd, a Sesa Goa group company.
Sebi is expected to file a reply before June 8, suggesting a redressal
mechanism for the investors whose money had been collected nearly five
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years ago.
Investors had been promised that SIL would be listed on the stock
exchanges, but this never happened.
A writ petition has been filed by a group of small investors against
Sesa Industries Ltd, a leading pig iron manufacturing company, Sesa Goa
Ltd and Sebi under the unfair trade practices code of Sebi and for
misleading the public.
The investors have asked for a possible share buyback, or a conversion
of the shares into Sesa Goa shares or any possible redressal system
whereby the shareholders' rights could be protected.
In November 1993, a preferential allotment was made to the then
shareholders of Sesa Goa in the ratio of 1:2. Sesa Goa is the hold-ing
company for SIL, with 75.4 per cent of the equity. In a subsequent
report, the company directors said that SIL would be listed at the
bourses in the next 12 to 18 months. This did not come about and the
board later stated that it was not the opportune moment for listing.
After a constant dialogue with the shareholders, the directors through a
circular dated April 26 said, that it was not possible for the listing
to take place at this moment. The division bench comprising Justice N J
Pandya and S S Parkar directed Sebi to look into the issue. The
shareholders were represented by