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Fresh tender alright to fetch better price - SC

The Supreme Court has ruled that an open offer voluntarily made through a public announcement for purchase of shares of the target company cannot be withdrawn when the offer becomes uneconomical to be performed. Allowing the appeal of the Securities & Exchange Board of India (Sebi) against the order of the Securities Appellate Tribunal (SAT) in the case of Akshya Infrastructure Ltd, the court said permitting such withdrawal "would give a field day to unscrupulous elements in the securities market to make public announcements for acquiring shares in the target company, knowing perfectly well that they can pull out when the prices of shares have been inflated due to the public offer". It added that such speculative practices have been sought to be prevented by Regulation 27 of the Take-over Regulations. The court further stated that SAT had gone wrong in invoking the Issue of Capital and Disclosure Requirement Regulations 2009 in this context.

 Article referred: http://www.business-standard.com/article/opinion/fresh-tender-alright-to-fetch-better-price-114050400773_1.html

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