High Court Bench declines to quash SEBI’s order

The Madras High Court Bench here on Friday declined to quash an order passed by the Securities Exchange Board of India (SEBI) on June 18 refusing to revise minimum offer price for purchase of equity shares in Zenotech Laboratories Limited by Daiichi Sankyo Company Limited from Rs.113.62 to Rs.160 per share.

Dismissing a writ petition filed by an investor, Justice R.S. Ramanathan said that an alternative remedy was available to the petitioner who could challenge the SEBI’s order before the Securities Appellate Tribunal and thereafter in the Supreme Court as provided under the SEBI Act, 1992.

Petitioner N. Narayanan (51) of Karaikudi in Sivaganga district said that he held 63,300 shares in Zenotech Laboratories which had a total equity share capital of Rs.34.42 crore.

Ranbaxy Laboratories Limited acquired 46.78 per cent shares in Zenotech at the price of Rs.160 per share between October 3, 2007 and January 28, 2008.

Thereafter, Daiichi Sankyo, a company incorporated in Japan, acquired 52 per cent share capital of Ranbaxy following a Share Purchase and Share Subscription Agreement entered between them on June 11, 2008.

In result, Daiichi Sankyo had indirectly acquired the share capital of Zenotech originally held by Ranbaxy.

On January 7, 2009 Daiichi Sankyo issued a public announcement to acquire 20 per cent of shares in Zenotech at a price of Rs.113.62 per share.

Immediately, the petitioner made a few representations to SEBI to review the price or otherwise he would be robbed of the value of his shares.

His request was rejected and hence the writ petition.

Mr. Narayanan claimed that as per regulations, the minimum offer price should not be less than the price at which the shares of Zenotech were dealt with during the preceding 26 weeks in the share market or the price at which the Daiichi Sankyo or Ranbaxy had purchased the shares of Zenotech during the preceding 26 weeks.