If the company fails to make the payment within 15 days of the order, SEBI would forfeit the escrow amount established for the open offer.

"The merchant bankers of the acquirers shall then proceed to realise the securities lying in the escrow account and make payment of consideration and interest amount to the shareholders of Indal who had accepted the offer of the acquirers. Following legal provisions as also the principals of natural justice, SEBI gave a hearing to SterliteIndustries and the complainants. After considering the submissions made, SEBI has passed an order directing the acquirers to make payment of Rs 221 in cash to the shareholders of Indal who have accepted the offer and tendered the shares upto June 2, the last day for offering the shares. This has to be done within 15 days of the receipt of the order. The interest of 15 per cent from July 2, the date by which the payment ought to have been made in terms of the regulations would also have to be paid by the acquirer", the SEBI statement issued late on Wednesday evening stated.

"Sterlite Industries and Eastern Galvanising made a public offer for acquisition of shares of Indal in February which was revised in May to acquire 52.03 per cent of the shares of Indal at a price of Rs 221, which was payable at Rs 131 in cash and Rs 90 in the form of issue of optionally convertible preference shares. However, the acquirers subsequently on July 26 withdrew the offer citing refusal of statutory approval of the shareholdersof Sterlite under section 81 (1A) of the Companies Act for the issue of OCPS. A show cause notice was issued to the acquirers asking them to explain why action should not be taken against them under the SEBI Takeover Regulations and the SEBI Act", the statement added.

According to SEBI sources, Sterlite had received about 4 per cent of Indal's equity in response to its offer, including a huge chunk of shares (in excess of 10 lakh) from leading foreign institutional investor, Templet on. It had deposited Rs 97 crore in the escrow account in the form of cash as well as securities.

Sterlite sources, however, put the total outstanding number of shares at a mere 9.9 lakh representing just about 1.4 per cent of Indal's equity. SEBI sources said that the escrow amount would be enough to make the payments to shareholders.

SEBI sources said that the regulator was of the view that its order would enable investors to get the benefit of receiving a high value for their shares. This value may never be realised bythese shareholders as the price of the Indal share has slumped to Rs 60 levels after having hit high levels when Sterlite and Alcan were bidding and counter-bidding for Indal.

Following the withdrawal of its offer, SEBI had decided to freeze the escrow account of the company created for the open offer till such time it gave its verdict on whether it was proper to withdraw the offer.

Sterlite's contention was that it had been asked to comply with the preferential issue guidelines and that too at the last minute and this had rendered its offer unviable.

SEBI had fixed a hearing in early September but on the same day itself Sterlite in a sudden development approached the Delhi high court alleging that the regulator was being biased against it and therefore the case should be tried by the high court. The petition was rejected on the grounds that it was premature. The company then went in appeal to the division bench of the high court but the appeal for a stay was rejected there too.

Subsequently, SEBIheld a detailed hearing in the matter and reserved its verdict in the case.