HC issues notice to DE Shaw on Amar Ujala deal

The Delhi High Court has issued notices to global investment major DE Shaw Group in connection with a deal wherein the US company acquired a stake in Hindi print media company Amar Ujala Publications in 2007.

Besides, the court has also sought clarifications from RBI, the government's foreign investment clearance body FIPB and Ministry of Corporate Affairs to explain their stand on the DE Shaw-Amar Ujala deal.

The notices have been issued after the court heard a petition filed by Amar Ujala Publications, wherein the media company has accused DE Shaw of indulging in fraudulent practices in acquiring the stake.

A single member bench of Justice Sunil Gaur has issued notices to the US-based firm and also directed the Reserve Bank of India, MCA and the Foreign Investment Promotion Board to clarify their stand in the deal.

The court asked DE Shaw to file its reply within two weeks and asked RBI, FIPB and others to submit their replies by July 14, the next date of hearing.

Amar Ujala in its suit claimed that the agreement was entered into fraudulently between the erstwhile management of Amar Ujala Publications Ltd and DE Shaw on the basis of false representations made by the global fund house.

When contacted, an Amar Ujala spokesperson said that they would refrain from making any comment in this matter as it was a sub-judice matter.

Amar Ujala and DE Shaw both has filed petitions against each other in the High Court.

However, the court declined to grant any immediate relief to the Amar Ujala Publications over attachments of their shares by DE Shaw and said that the proceedings are already pending before the Company Law Board and can raise their grievances there only.

"As the proceedings under the Arbitration Act and CLB proceedings are already pending, the aggrieved party can approach the judicial forum, during the intervening period, if need arises," the High Court said.

DE Shaw also assured the court that all issues regarding attachment of share would be done in accordance with law.

DE Shaw had acquired its 18% stake in 2007 for Rs 117 crore and the deal was approved by FIPB.

However, Amar Ujala the Hindi print media company last month complained to the FIPB that DE Shaw was in violation of foreign investment rules and termed the deal as illegal.

Amar Ujala has also claimed that DE Shaw misled the FIPB by not informing them about certain conditions of the deal.

Last month, FIPB sought clarifications from DE Shaw on whether the deal was in conformity with all the terms and conditions specified in its approval.