International Paper goes to SC against SAT order
A bench headed by chief justice Altamas Kabir continued the stay, granted by Securities Appellate Tribunal (SAT), till October 29, the date on which the matter is actually listed.
Questioning the power of Sebi to interfere with the payment of non-compete fee, the Singapore firm in its appeal said that Sebi’s finding that the individual promoters were not eligible to be paid non-compete fee was misdirected as the two promoters by virtue of being shareholders of the target and other corporate entities and associated with the management had acquired considerable knowledge and were, therefore, capable of competing with the business.
NYSE-listed International Paper and IP Holdings in March last year had acquired 53.46% stake by striking a deal with the promoters of Andhra Pradesh Paper Mills for around R1,112 crore. Subsequently, it made an offer to shareholders of the company as required under the law, but had paid non-compete fees selectively to the founders — the Bangur family.
The open offer was made at R544.20 a share and the deal with the promoters was fixed at R523 per share. The acquiring company also agreed to pay 25% as non-compete fee to the promoters of the Andhra Pradesh Paper Mills.
Sebi objected to this on the grounds that certain categories of
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