The Hindu Business Line : Clariant case: SEBI may file review petition

THE Securities and Exchange Board of India (SEBI) is likely to file a review petition before a full bench of the Supreme Court on today's order by a single-judge bench of the apex court on the Colour Chem-Clariant case.

According to highly placed sources, the market regulator is weighing the legal options in the interest of the minority shareholders of Colour Chem.

Sources said that the verdict did not take into account the fact that the equity shares, unlike other assets, are essentially transferable with all past liabilities and assets as also losses and income accrued.

"This means that the ownership constantly may change along with concomitant rights and liabilities. Also, there are laid down market rules to determine the ownership at a given point in time. Continuity in holding over a long period cannot be made a criterion for valuation of an equity or any right stemming from the ownership," said legal experts involved with the case.

According to stock market sources, the regulator is also concerned about the fact that the minority shareholders may suffer if prolonged litigation is used by an acquirer to reduce payment of interest to the minority shareholders under the takeover regulations.

Today's judgment has been seen by the minority shareholders as being detrimental to their interests; the Colour Chem counter witnessed heavy selling. The stock reacted negatively on the bourses and closed around the downward circuit with a huge traded quantity.

On the BSE, it finished at Rs 249.80, down from previous day's closing of Rs 311.15. The traded quantity on the BSE shot up to 1,19,522 shares from yesterday's volume of just 2,657 shares. On the NSE, traded quantity jumped to 4,26,558 shares (49,060 shares).

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