SAT allows Essar Steel to delist, vacates stay

The Securities Appellate Tribunal (SAT) today allowed Essar Steel to delist from the stock exchanges, vacating its stay order issued last week. According to a NSE circular, the shares will be delisted on December 24.

"Having heard the learned counsel of both the parties and keeping in view objections raised...we vacate the interim order passed by us on December 5," SAT presiding officer Justice N K Sodhi said, quashing the stay order.

Essar Steel's counsel A Sundram had argued that the co-complainant of the appellant had purchased shares of the company since January this year after coming to know about the de-listing process.

"Therefore, it is clear that these purchases were made with an oblique motive, particularly when the complainant had alleged a fraud on the part of company and its promoters," said Sundram.

SAT kept the delisting of Essar Steel from stock exchanges in abeyance on 5 December after an investor moved the authority alleging that the discovered price of Rs 48 a share was far below the intrinsic value of the company. The suspension of trading, which was to happen last Friday, was thus delayed.

Now that the interim order has been vacated, the stock exchanges would have to decide on further action.

The preliminary hearing to sum up the matter would take place on 9 January, 2008, said Sodhi.

According to the 23 November communication by the stock exchanges, Essar Steel was to delist on December 7. The next date for suspension of trading was December 14.

The stock of Essar Steel plummeted by 9.92 per cent to close at Rs 57.20 on the Bombay Stock Exchange, on Wednesday.

---

Shareholder demands cancellation of delisting

Yet another shareholder of Essar Steel, P S Subramanian, who claims to hold 75,000 shares, today moved an application before Justice N K Sodhi on Wednesday, demanding cancellation of the proposed de-listing by the company.

Moving the application, Subramanian said that the company promoters, who own majority shares, had deliberately kept the share prices low.

"When corporates such as the Tatas and the Mittals are adding to their steel capacities due to growing demand, the Ruias are fooling shareholders by declaring losses in Essar Steel," he alleged.

Subramanian also pointed out that after de-listing, Essar Steel would be sold to one of the group companies, as pointed out in the offer document.

The application, said Justice Sodhi, would come up for hearing on 9 January, 2009.