HC rejects plea seeking to quash Sebi Zenotech order

The Madurai bench of the Madras High Court has dismissed a writ petition seeking quashing of a Sebi order on the purchase of Zenotech Laboratories shares by Daiichi Sankyo at Rs 113.62.

Sebi had refused to revise the minimum offer price for purchase of equity shares in Zenotech Laboratories by Daiichi Sankyo from Rs 113.62 to Rs 160 per share.

Justice R S Ramanathan suggested that the petitioner, N Narayanan, who is an investor, challenge Sebi's order before the Securities Appellate Tribunal and thereafter in the Supreme Court, as per the Sebi Act, 1992.

The Petitioner submitted that he has 63,300 shares in Zenotech Laboratories, which had a total equity share capital of Rs 34.42 crore. Ranbaxy Laboratories acquired 46.78 per cent shares of Zenotech at Rs 160 per share between October 3, 2007 and January 28, 2008.

Daiichi Sankyo acquired 52 per cent share capital of Ranbaxy following a share purchase and share subscription agreement between them on June 11, 2008. As a result, Daiichi Sankyo had 'indirectly acquired' the share capital of Zenotech originally held by Ranbaxy, he contended.

Daichi Sankyo issued a public announcement to acquire 20 per cent of shares in Zenotech at a price of Rs 113.62 per share on Jan 7, 2009.

Though he approached Sebi to review the price as otherwise he would be robbed of the value of his shares, Sebi rejected it.

He contended that as per regulation, the minimum offer price should not be less than the price at which the share of Zenotech were dealt with in the preceding 26 weeks in the share market or that at which Daiichi Sankyo or Ranbaxy had bought shares of Zenotech during this period.