The Supreme Court on Monday denied relief to Linde India in its plea seeking a stay on a directive by the Securities and Exchange Board of India (SEBI) about conducting a valuation exercise of certain related-party transactions of the industrial gases company.
The company approached the apex court for relief after the Securities Appellate Tribunal (SAT) upheld SEBI’s decision and asked to continue with the valuation exercise. However, the apex court said that SAT has already dismissed the plea and therefore the court’s intervention is not required at this stage.
SEBI had directed the National Stock Exchange (NSE) to appoint a valuer to carry out the valuation of the business by the company, following a probe pertaining to agreements and transactions by Linde India with its related parties Praxair India and Line South Asia Services.
In its order last week, SAT said there is no illegality in NSE appointing a valuer, and the valuation exercise can be completed, pending a hearing of the main appeal, provided the valuation details are kept confidential. The main appeal by Linde India against the entire SEBI order is set to be heard in the tribunal on October 15.
The company had moved SAT with a miscellaneous appeal seeking a stay on the valuation exercise, at least until the main plea was heard, as it involved price-sensitive information and the whole process would be “futile” if the main order was overturned. The tribunal dismissed the plea but asked SEBI to issue the necessary order/ clarification to NSE for maintaining confidentiality with respect to price-sensitive information revealed during the valuation exercise.
Linde India, in its plea to SC, brought up similar concerns regarding the regulator’s directions to publish price-sensitive information to a third-party valuer, which could have serious consequences in the securities market and impact investors’ confidence. The top court refused to intervene in the matter since the tribunal had already addressed confidentiality concerns.
The market regulator’s interim order came after multiple complaints by shareholders that the company did not seek their approval before executing material-related party transactions with its related parties Praxair India and Line South Asia Services.