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Securities and Exchange Board of India v. Akshya Infrastructure Pvt. Ltd.

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 6041 of 2013)Decided 25 Apr 2014
Civil Appeal No. 6041 of 2013
Justice S.S. Nijjar · Justice A.K. Sikri

Background

Akshya, part of MARG Limited's promoter group, publicly offered to buy shareholders' shares at ₹91 each. It later sought to withdraw the offer and its escrow money, saying SEBI's thirteen-month delay made the transaction commercially unjustifiable. The Securities Appellate Tribunal permitted withdrawal, and SEBI appealed.

Decision Breakdown

The Supreme Court allowed SEBI's appeal, set aside the Tribunal's order and restored SEBI's directions. Under the 1997 takeover regulations applicable to this offer, voluntary and mandatory open offers were equally bound by the strict withdrawal rule. Commercial unviability did not amount to the kind of impossibility required for withdrawal. Although SEBI's delay was strongly criticised, it neither cancelled the offer obligation nor counted as refusal of an independent statutory approval. The failure to give a hearing did not invalidate the decision without demonstrated prejudice; disputes concerning earlier acquisition triggers remained open.

Lesson Learnt

Under the takeover rules governing this transaction, announcing an offer committed the acquirer despite later commercial regret. Shareholders' interests and market effects prevented withdrawal merely because the offer had become unattractive.

Official source (sci.gov.in)View Judgment (PDF)

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