Luxottica told to deposit Rs 63 crore with Sebi

 The Supreme Court directed Luxottica Group SPA to deposit Rs 63 crore in bank guarantee with the Securities and Exchange Board of India, while admitting its appeal against the order of Sebi in the take-over of the eye care arm of Bausch & Lomb, the owners of the famous Rayban brand of spectacles.

 The court stayed the judgment of the Securities Appellate Tribunal (SAT) subject to the furnishing of the bank guarantee.

 One of the main issues in this case is the valuation of the shares of the Indian company and payment of interest to the shareholders.

 Another issue is whether Sebi can interfere in agreements signed abroad about merger of Indian subsidiaries of foreign companies.

 Luxottica, an Italian company, decided to buy the world-wide business of Bausch & Lomb, a US company, in sunglasses and spectacle frames in 1999.

 Bausch & Lomb South Asia Inc, a subsidiary of the US company, held 44 per cent equity holding in the Indian subsidiary, which is the target company.

 However, the Indian company had both eye care products as well as eye wear business. The 1999 agreement was to take over the eye wear business only, after hiving it off from the whole.

 Pursuant to the shareholders