Sebi probing Linde India for related party transaction violation

The Securities and Exchange Board of India (Sebi) on Monday directed Linde India to comply with the norms of materiality thresholds for future related party transactions (RPTs) based on the aggregate value of transactions, amid an ongoing investigation by the regulator.

The market regulator’s probe follows complaints by shareholders that the company did not seek their approval before executing material RPTs. Sebi said that the company did not make any valuation available to the board when the decision to award future businesses to a related party was made.

“Such actions effectively deprive public shareholders of an opportunity to express their views on transactions which have the potential to disproportionately benefit controlling shareholders at the expense of the broader shareholder base,” said Ashwani Bhatia, whole-time member, Sebi in the order. 

Sebi will be considering punitive measures once the ongoing investigation reaches its conclusion. The regulator has issued summons to key personnel and independent directors of the firm. However, Linde and its independent directors have moved the Bombay High Court against the summons and investigation initiated by Sebi.

No stay has been granted in the matter.

The matter pertains to various agreements and transactions by Line India with its related parties Praxair India and Line South Asia Services.

The Sebi has directed the company to seek shareholder approval if the aggregate value of the RPT exceeds materiality thresholds. Further, the regulator has asked the National Stock Exchange (NSE) to appoint a registered valuer to carry out a valuation of the business.

NSE will share the valuation report with Sebi and the company. Following this, Linde India will have to disclose key observations from the report.

Measures for ease of doing biz on Sebi board’s table

The Securities and Exchange Board of India (Sebi) will hold its board meeting on Tuesday to consider approving several measures related to ease of doing business, said sources. 
 

Sebi may exclude equity-oriented passive funds from the 25 per cent investment limit in group companies and allow fund houses to have a single fund manager for commodity and overseas investments.

Dinesh Kumar takes charge as SAT presiding officer 
 

Justice PS Dinesh Kumar on Monday took charge of the Securities Appellate Tribunal (SAT) as the presiding officer after the oath ceremony. Justice Kumar, formerly a Chief Justice of High Court of Karnataka, has been appointed for four years.

The tribunal had been functioning without a judicial member for the last four months after previous presi­ding officer Justice Tarun Agarwala vacated office in December. On Monday, Dheeraj Bhatnagar (retired Principal Chief Comm­issi­oner of Income Tax, Delhi) also took charge as a technical member of the tribunal which only had Meera Swarup as a technical me­mber. Legal experts said that long pending important cases will move forward now with a bench available to hear the cases.