SAT stays Sebi's directions in open offer for Federal-Mogul Goetze

In a letter dated 30 August, the market regulator appointed MM Nissim & Co as an independent chartered accountant to value the shares of Federal-Mogul Goetze for the open offer

The Securities Appellate Tribunal (SAT) on Friday stayed the Securities and Exchange Board of India’s (Sebi’s) appointment of an independent valuer for determining the open offer at Federal-Mogul Goetze (India), which makes automotive components.
 
The tribunal asked Sebi to file a reply within 10 days while listing the matter for admission on October 9.
 
In a letter dated August 30, the market regulator appointed M M Nissim & Co independent chartered accountant for valuing shares of Federal-Mogul Goetze for the open offer.
 

Promoter Pegasus Holdings challenged Sebi’s move, stating that there was no such requirement under the law concerned.

 
An indirect change in the promoter group of Federal-Mogul caused the open offer. This followed the merger of Pegasus Merger Co and Tenneco Inc, the ultimate holding company of Federal-Mogul Goetze (India).
 
The tribunal is hearing the matter on the right norm for determining the offer price.
 
“We find that the provision of Regulation 8(4) will only come into play only if the offer price as per Regulation 8(3) and 8(5) is incapable of being determined. We find from the impugned order that there is no consideration that respondent (Sebi) have come to a conclusion that the price of the shares cannot be determined under Regulation 8(3) or 8(5),” said Justice Tarun Agarwala.

 
Sebi had intervened in the valuation of the offer price of the company earlier in November 2018 too following the acquisition of Federal-Mogul Goetze by Tenneco in the same year. It had appointed Haribhakti & Co for independent fair valuation and, later in March 2019, directed a revision of the offer price to Rs 608.46 apiece from Rs 400. Then, the company had contended that the valuation methodology had not been provided by Sebi and it was not given an opportunity to review it.
 
On Friday, the shares of Federal-Mogul Goetze closed at Rs 370, dropping nearly 6 per cent over its previous close.

 
Talwalkars barred from securities market for 18 mths
 
The Securities and Exchange Board of India (Sebi) on Friday barred seven entities, including erstwhile promoters and management of Talwalkars Better Value Fitness and Talwalkars Healthclubs, from accessing the securities market for 18 months in a matter related to alleged fraudulent trade practices and misrepresentation of financial statements. The markets regulator also imposed a total penalty of Rs 1.8 crore and Rs 66 lakh on the companies and the seven entities in two separate orders. Sebi has further restricted them from being associated with any listed firm for the next 18 months. The companies are currently under liquidation proceedings as per an order by National Company Law Tribunal in April 2022.