The Andhra Pradesh High Court will tomorrow decide on the petition filed by two investors requesting it to restrain the BSE and NSE from giving any clearance to the scheme of amalgamation or merger between Sun Pharma and Ranbaxy.
After hearing the arguments from the counsels of the petitioners, Ranbaxy, Sun Pharma and SEBI, Justice G Chandraiah said he will pronounce the verdict tomorrow. The petitioners alleged that there was heavy trading of Ranbaxy stock before the merger with Sun Pharma was announced on April 6, and requested the court to direct the SEBI to investigate the insider trading of Ranbaxy shares and take appropriate action against Sun Pharma and Silver Street Developers.
The court had earlier issued interim orders to maintain status quo with regard to the merger. During the arguments, Y Suryanarana counsel of SEBI informed the court that an investigation is currently going on into the allegations of insider trading allegations.
Counsel for SEBI also said that the bourses are yet to forward their opinion on the merger or amalgamation issue to the market regulator. D Prakash Reddy, senior counsel who argued for Ranbaxy said insider trading allegations and merger process are two different issues and hence be dealt with separately and cannot be mixed.
B Adinarayana Rao, counsel for Sun Pharma said the SEBI will investigate allegations of insider trading with regard to the persons involved with that and either Ranbaxy or Sun Pharma as companies have nothing to do with insider trading. Sun Pharma Counsel also informed the court that merger or amalgamation process involves lengthy processes. The High Courts of Gujarat and Punjab and Haryana will issue public notices when both the companies approach for court approval.
The petitioners will have opportunities to voice their concerns when the courts issue public notices with regard to the merger proposal and also Competition Commission of India will also give its nod for the merger.
The Mumbai-based Sun Pharma had on April 6 announced that it would fully acquire Ranbaxy in an all-stock transaction with a total equity value of USD 3.2 billion, along with debt of USD 800 million, taking the overall deal value to USD 4 billion.