The Hindu Business Line : Colour Chem open offer case comes up in SC

THE long-pending hearing on the Colour Chem case pertaining to an open offer for 20 per cent to minority shareholders by the company's overseas parent under the take-over Rules came up for hearing in the Supreme Court today and will continue tomorrow.

The apex court had completed hearing on a somewhat similar case related to Wimco on July 28, 2004, but reserved its judgment.

On October 16, 2002, the SEBI asked Clariant International, the foreign parent/acquirer of Colour Chem, to make an open offer taking November 21, 1997 as reference date, and to pay to tendering shareholders an interest of 15 per cent per annum from March 22, 1998 till the date of payment after closure of offer. Clariant went in appeal before the Securities Appellate Tribunal (SAT), which ordered that the interest would be payable only to those shareholders who have continuously held the shares from March 22, 1998 till the date of offer.

According retail investors, who have been holding on to the stock, the basic offer price worked out to Rs 319.73. (an average of six months' highs and lows of market prices to November 13, 1997). Including interest, till July 22, 2004, the value of a Colour Chem stock is estimated at Rs 623.73, market sources pointed out.

The Colour Chem stock has gained by Rs 32 in the last three sessions on the BSE and closed today at Rs 294.35. The Wimco stock has also inched up by over 9 per cent in the last two trading sessions.

Investors are keenly awaiting the apex court's verdict, particularly on the interest element, as the SEBI verdict on the issue had been modified by the SAT in other such cases also.

According to legal experts, in case of Wimco, the acquisition of shares by Swedish Match, overseas parent, was essentially an inter se stake transfer between the joint promoters and technically stands on a slightly different footing.

More Stories on : Courts/Legal Issues | Open Offers

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