Sebi Verdict On Sesa Goa In A Week

The Securities and Exchange Board of India (Sebi) chairman D R Mehta, who heard the two parties in the Sesa Goa controversy yesterday, is likely to take a final decision on the issue within a week's time.

The two parties, Sesa Goa minority shareholder Hari-narayan Bajaj, and representatives of the Japanese conglomerate Mitsui, had a three-and-a-half hour meeting with the Sebi chairman.

They presented written submissions of their views to the market regulator.

Crucially, the Mitsui representatives while remaining away from the facts of the case, have challenged the jurisdiction of the Sebi board in the matter pertaining to substantial acquisition of shares extending to transactions involving a foreign company.

According to sources, Mitsui representatives while admitting that there has been a change in the Sesa Goa company board, said that the Sebi Act applies only to the country and cannot have extra-territorial reach.

"The mischief rule" of the interpretation (that the jurisdiction of the Sebi board extends to transactions in non-Indian companies) has been invoked by the petitioner in support of his submissions,'' Mitsui representatives said.

Mehta said that the Sesa Goa case will have a far-reaching implication in terms of indirect takeovers and role of market regulator in relation to overseas transactions.

"We will take the entire case into consideration as it will have a bearing on other cases," the Sebi chairman said.

Mehta declined to comment on the factors which will come into consideration but said that the matter would not be delayed upon further and a decision is likely to come about 'relatively quickly'.

Bajaj yesterday countered the issue on the grounds that the Sesa Goa controversy involved the buying into the principal shareholders Finsider International and this in turn affected the Sesa Goa company.

While there has not been a direct acquisition of Sesa Goa shares by Mitsui, the control of management has undergone a change.