...pulls up BSE for denying Ask me preferential share listing

Our Markets Bureau

Mumbai, Aug 24: IN a remarkable judgment, the Securities Appellate Tribunal (SAT) has pulled up The Stock Exchange, Mumbai (BSE) for denying the listing of the preferential shares of Ask me Info Hubs Ltd. SAT has directed the BSE to hear the company and pass a reasoned order in the next three months. The company’s equity shares were already listed on the BSE.

In its order, the tribunal has also raised a policy issue before the Securities and Exchange Board of India (Sebi) and ministry of finance (dept of economic affairs) on the need for fresh approval from stock exchanges for listing of fresh shares of a company, which is already listed on the same exchange.

It was in December 2000 that the BSE had rejected listing to the 20.5 lakh shares issued to the promoters of the company on preferential basis on the grounds that the shares of the company were pushed down in order to make the preferential offer at a lower price. BSE said that the share price was pushed down from Rs 71.25 to Rs 13.3 and clients dealing in the scrip were related to each other and with the company.

SAT presiding officer C Achutan directed BSE to pass a reasoned order after hearing the company. In this direction, SAT has directed the BSE to provide relevant material to Ask me and pass an order in the next three months. In the order, SAT said that the BSE had taken a decision, of not allowing the listing the 20.5 lakh shares of Ask me, without following the principles of natural justice. It also said that the company was not given an opportunity to put forth its views. “This is a serious lapse, which cannot be ignored or condoned. It appears to me that the impugned order is unreasonable in the sense that it is manifestly arbitrary and bad,” the order said.

Since the listing of shares was denied for preferential shares, SAT, as a matter of policy concern on seeking permission every time the shares are to be listed on the same exchange where the similar security is listed, has asked Sebi and ministry of finance (dept of economic affairs) to look into the matter so that there is no delay in listing of fresh shares.

It has asked to find better ways and means for providing clear guidelines on this issue instead of leaving it to the discretion of each stock exchange.