The share price of Global Offshore was locked in 5 per cent upper circuit at ₹41.60 on the BSE on Thursday on the back of the news that the Supreme Court (SC) on December 1 disposed-off an appeal by market regulator SEBI in the matter involving an open offer to acquire the shares of Global Offshore Services. In 2018, the Securities and Appellate Tribunal (SAT) had asked SEBI to take a fresh look at the complaints of suppression of details with regard to the open offer by India Star Mauritius. SAT issued its order on the appeal by Manoj Mittal, a high networth individual (HNI), holding a large stake in Global Offshore. SEBI had moved SC with regard to the complaint without making SAT a party to the case. Since SC has disposed-off the SEBI case, effectively the SAT order to SEBI will now stand, experts told Business Line.
General Insurance Company (GIC) too had complained to SEBI with regard to suppression of vital details by those who had made the open offer to acquire Global Offshore shares.
Open offer
India Star Mauritius, a foreign fund, had made an open offer to acquire 15 per cent in Global Offshore (then known as Garware Offshore Services) at ₹234 after its holding breached the 20 per cent level upon conversion of the debentures they were holding. GIC did not offer its stake in the open offer and complained to SEBI that the acquirers had suppressed vital information. There were 40 other complaints lodged with SEBI involving one by Mittal.
Investors of Global Offshore had moved SAT pleading India Star Mauritius to make a fresh offer as some of the material facts were suppressed in the offer document made during the open offer. GIC had said it would have offered its shares if those facts were disclosed. SAT directed GIC to move SEBI.
After looking for four years into the complaint of GIC and other investors against India Star Mauritius for suppressing facts in its open offer, SEBI approached the SC. SEBI did not include SAT as a party in SC despite the fact that SAT in February 2018 had directed SEBI to hear the plea afresh and give a verdict within four months.
Disclosures issue
Both Mittal and GIC in their complaint told SEBI that India Star Mauritius has hidden the fact that its parent IndiaStar Fund LP was owned by Sycamore Management Corporation. The complaint maintained that the disclosure was mandatory under the Substantial Acquisition of Shares and Takeovers Regulations, 1997 and under SEBI circular dated March 8, 2004.
The complainants told SEBI that Global Offshore did not disclose that Sycamore Ventures, a group company, had made investments in Indian infrastructure companies and in oil & gas. It also claimed that the company’s Director, Ravi Pratap Singh’s stint at Sera Nova Inc, Dahava Resources and Silverline Technologies were not disclosed.
GIC, in its complaint, said that summary judgment was passed by a US Court against Sera Nova Inc for failure to make proper disclosures to the US Securities and Exchange Commission and Silverline Technologies was facing huge financial difficulties/ claims of over $18 million from various parties including Indian banks. The Canadian regulator had banned trading in the securities of Dahava Resources as it failed to comply with mandatory filing/disclosure requirements.