Srei to sell 24% stake in power unit by April
HC orders that the shares held by Power Trust be sold; Sebi went to court to force the promoters to sell the shares as public holding exclusive of the trust had fallen to a mere 4.32%
Srei Group firm India Power Corp Ltd (IPCL), a power distribution and generating entity, would sell about 24% stake to the public by April to comply with minimum public shareholding norm.
Calcutta High Court has ordered that the shares held by Power Trust should have to be sold off after Securities and Exchange Board of India (Sebi) proved before the court that the Trust holding the shares is not independent of the promoters, the Kanorias of Srei.
"The Trust will cite this order and make a public offer for sale of the said 32,63,16,563 shares. Advertisements in such regard will be published in such newspapers as may be suggested by Sebi within a week of the form of the advertisement being forwarded to the office of Sebi in Kolkata," the court order of January 27 said.
IPCL, which had acquired 1000 megawatt power plant from Meenakshi Energy a year ago, closed at Rs 42 at NSE.
As per the latest promoters' shareholding disclosure as on December-end, the Power Trust has been holding 24.69% in India Power.
The development follows two years of legal battle between Sebi and IPCL on the issue, earlier reported by DNA Money.
Sebi went to court to force the promoters to sell the shares as public holding exclusive of the trust had fallen to a mere 4.32%.
"...The grievance (of Sebi) is that as a result of substantial shares in the amalgamated company being parked with the purported Trust, the public shareholding in the amalgamated company, which is a listed public company, has stood reduced to 4.32% of its paid-up capital," the order says.
IPCL was formed after amalgamation following acquisition and merger of state-owned DPSC Ltd, which was acquired in 2009 by a consortium, also called IPCL, formed between the Kanorias and Bhaskar Silicon.
Sebi, in 2013, identified hundreds of companies, including IPCL, for not complying with its 25% minimum public shareholding norm.
The company then told Sebi that it had complied with the norms by transferring 24.69% to a trust having independent Board of Trustees to bring down promoters' stake to 68.31% and that the Trust would continue to hold the shares till valuation is favourable.
Sebi, however, questioned the independence of the Trust and went to court.