Delisting issue: 'Reviewing court order,' says Schneider Electric

Schneider Group’s India arm is reviewing a court order, which may require it to offer a better exit to domestic shareholders.

“The order dated 15 February 2021...in the matter of Sebi order on Schneider Electric President Systems Ltd., is currently under review. Every decision, on the way forward, will be in keeping with the highest standards of business best practices which Schneider Electric is committed to,” said the Schneider Electric President Systems India spokesperson in an e-mail response.

Schneider Electric President Systems had sought the Bombay High Court’s intervention after the stock market regulator ruled in favour of public shareholders earlier this year. The court asked it to approach the Securities Appellate Tribunal, a body which hears appeals against the stock market regulator’s decisions.

“Considering the composition of the Securities Appellate Tribunal... we do not think there is any basis in the apprehension expressed... However, only to satisfy and allay the concerns of the Petitioner, we only say that in the event the appeal is filed by the Petitioner, the same would be decided by the Securities Appellate Tribunal without being influenced by its earlier order,” said the Bombay High Court order dated 15th February 2021.

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The tribunal had asked the Securities and Exchange Board of India (Sebi) to pass a reasoned order while highlighting the importance of investor protection in its 26th November, 2019 order.

The regulator had asked it to list on a national exchange or to offer an exit to shareholders.

“In case the company opts for delisting, the reference date for computing the floor price would be the date on which the company made the public announcement for the exit offer under the 2016 circular,” said the order dated January 19, 2021.

The situation came about after the exit of regional stock exchanges in India. Schneider’s shares were listed on the Bangalore Stock Exchange (BgSE) and the Pune Stock Exchange (PSE). Both have ceased to function. The Sebi order noted that a regional stock exchange listed company cannot unilaterally delist using easier delisting norms under a 2016 circular if it is eligible to list on a nationwide stock exchange.

“Such companies can delist only through the process laid down in the Delisting Regulations, and not by availing the relaxations under the 2016 circular,” the Sebi order said.

There were 21 stock exchanges in 2008. Most of these were regional ones. Trading now happens largely on the National Stock Exchange and the BSE.