The Securities and Appellate Tribunal (SAT) today ruled in favor of Oracle Financial Services Software and allowed it to declare interimdividend of Rs 485 and the record date has been fixed for 25th September.
The controversy stemmed from the interpretation of Clause 16of listing agreement by Securities Exchange Board of India (Sebi), stock exchanges and the company.
Stock exchanges and Sebi maintained that there should be agap of 30 days between book closure and record date for declaration of interimdividend.
On the other hand the software company based its decision of recorddate that the time difference of 30 days is needed between two book closuresand two record dates.
As per clause 16 of the listing agreement Oracle gave sevendays notice to the stock exchanges regarding the record date and sought theirapproval.
However as the gap between book closure and record date was less than30 days the bourses referred the matter to Sebi.Sebi in-turn guided stock exchanges that the record date of24th September was a violation of listing agreement.
In the order SAT stated that prima facie they do not seemerit in the contentions raised on behalf of the Sebi. The tribunal maintainedthat they agree with the company's interpretation of clause 16 and allowed themto fix record date for the heavy dividend that is close to Rs 500 per share.
On 12th September the company during its annual generalmeeting (AGM) approved an interim dividend of Rs 485 per share.
"In view of our prima facie opinion, we direct both thestock exchanges i.e. BSE & NSE to announce the record date for interim dividend" so as to enable the appellant to make payment to the investors by 29th September, 2014. We make it clear that passing of our order will not come inthe way of SEBI initiating any proceedings," it said.
