TROPICAL PLANTATIONS LIMITED REPRESENTED BY ITS DI Vs. UNION OF INDIA REPRESENTED BY SECRETARY TO GOVERNM

JUDGEMENT

(1.) This writ petition is filed by 17 exclusively listed Companies of de-recognised/non operational/exit stock exchanges which have been placed in the Dissemination Board challenging Exhibit P10 circular issued by the Securities and Exchange Board of India (SEBI) . It is contended that the petitioners are mostly plantation Companies formed as Joint Stock Companies which were incorporated in some cases as early as in the year 1919 with a paid up share capital of Rs.50 lakhs or less. It is stated that the Companies were listed with the erstwhile Madras Stock Exchange Limited. The SEBI had taken steps for de-recognising stock exchanges with a turn over of less than Rs.1, 000 crores by Exhibit P2 circular. The exclusively listed Companies were enabled to get listed in nationwide stock exchanges where the stipulation was that they should have paid up capital of at least Rs.3 crores. Since the petitioner Companies could not raise such share capital, they were moved to the Dissemination Board of the Stock Exchange by virtue of Exhibit P4 circular. The petitioners were required to pay the listing fee and they have paid the same. It is stated that by Exhibit P10 circular, the SEBI has provided that the Exclusively Listed Companies (ELCs) which were currently on the Dissemination Board will be allowed to raise capital for meeting the listing requirements through preferential allotment rule in consonance with the SEBI regulations. It is stated that the ELCs which failed to list on nationwide stock exchanges shall provide exit to its investors as per paragraph</i> 4.d of the circular. paragraph</i> 4.d provides the procedure to provide exit to investors, which reads as follows:

(2.) The ELCs were directed to indicate their intention to comply with listing or to provide exit and submit their plan of action to designated stock exchanges within three months. paragraph</i> 6 of Exhibit P10 circular provides for action against Companies remaining on the Dissemination Board. paragraph</i> 6 reads as follows:

(3.) Annexures A-ii to A-x provide for a public announcement by the promoter of the Company with regard to the investor exit option. The promoter was required to open an escrow account in favour of the independent valuer/designated stock exchange and deposit the total estimate amount of consideration on the basis of the exit price and number of outstanding public shareholders. The promoters were directed to make payment of consideration in respect of shares tendered within 15 working days from the date of completion of offer.