SAT allows Hotel Leela's asset sale to Brookfield
ITC is now seeking to challenge the SAT ruling in the Supreme Court.
On Thursday, appellate tribunal, presided over by Justice Tarun Agarwala, CKG Nair and MT Joshi in its oral order rejected the plea filed by ITC that challenged the Sebi order.
"After the order was pronounced, ITC made plea that they need time to appeal in the Supreme Court and hence they want two weeks time for the same. The counsel for the respondents opposed the same, the oral request thus is rejected," said the SAT in its oral order.
All the respondents including JM ARC, Hotel Leela and the promoters have decided to approach the Supreme Court by way of filing the caveat petition, so that if ITC approaches the Apex Court, respondents get a chance to put their arguments as well.
Aggrieved by Sebi's recent order asking Hotel Leela to conduct a shareholders' vote, tobacco-to-hotels conglomerate ITC, which holds 7.92 per cent in the indebted hospitality chain, had moved SAT seeking a stay on the postal ballot or keeping the final outcome of the votes on hold until the tribunal hears the order.
Earlier, Hotel Leela Venture while declaring its June quarter results said, voting will begin on August 18 and will end on September 16. The company said it will declare the results of the postal ballot September 18.
In July, Sebi had asked Hotel Leela Venture to provide all relevant details of the sale transaction between it and Brookfield to shareholders for their nod.
The company will also have to disclose the details of valuation of both the asset sale transaction and additional intellectual property transaction to shareholders for their approval. The regulator said during the course of the postal ballot that the valuation reports should be kept for inspection by the shareholders of Hotel Leela Venture.
Besides, the asset sale transaction of the company along with the intellectual property transaction of the promoters and its affiliates should be put to vote before shareholders afresh. The promoters and promoter group of Hotel Leela Venture should not participate in the voting process, for the transfer of ‘Jamavar’ trademark, Sebi had said.
ITC challenged the Sebi order that held that the portion of the proposed sale transaction by Leela Venture involving pay outs to promoters and to JM Financial ARC.
The regulator had also held that JM Financial ARC violated the takeover code. However, JM Financial ARC is yet to challenge that part of the order.
ITC has argued that since takeover regulations violations stand established, the voting rights on such shares should not be exercised.
Senior lawyers Darius Khambata, Pesi Modi and Somasekhar Sundaresaran appeared for ITC. Senior Counsel Janak Dwarkadas, along with Tomu Francis of Khaitan & Co appeared for JM ARC, while, Senior Counsel Navroz Seervai appeared for the Hotel Leela along with law firm Veritas Legal and Senior Counsel Ravi Kadam appeared for the promoters respectively.