The Hindu Business Line : SAT seeks SEBI clarification on transfer of holdings in Sree Karpagambal Mills

IN an interim order, Securities Appellate Tribunal (SAT) on Tuesday asked SEBI to explain how it gave an exemption to Sree Karpagambal Mills on transfer of promoters' holdings without following its takeover regulations.

The case relates to a SEBI advance ruling granting exemption (from making an open offer) to acquirers of shares in the Sree Karpagambal Mills. The acquirers - Mr A. Palaniappan, Mr Karti P Chidambaram - have allegedly made substantial acquisition of share in the company.

"A SEBI order earlier stated "it is observed that the proposed acquisition of 59,012 shares by Mr A. Palaniappan, Mr Karti P. Chidambaram and Halidon Marketing Pvt Ltd (acquirers/transferees) whereby the shareholding of transferees along with person acting in concert with them would increase from 26.23 per cent to 65.44 per cent (59.88 per cent of transferees and 5.56 per cent of the person acting in concert with them) would be eligible for exemption from the applicability of the provisions of the Takeover Regulations."

SAT has now directed SEBI to file the affidavit to state whether Halidon Marketing Pvt Ltd, the transferee, held the shares in the target company for a period of three years or whether the three-year period in the opinion of SEBI is necessary to claim exemption.

Mr Karti P.Chidambaram is the son of the Finance Minister, Mr P. Chidambaram.

"We are passing this order in view of the fact that consistency in interpretation of Regulations is a hallmark of a good Regulator," SAT said in its interim order.

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