Sebi spanner: If I were advising, I would have told IHH to go ahead with the open offer: Sanjay Asher

“To my mind, it is not correct of Sebi to ask IHH to go back and get an approval from the Delhi High Court for making an open offer,” says Sanjay Asher, Senior Partner, Crawford Bayley & Co

Last week, IHH indicated that they were ready to go ahead with that stalled open offer for Fortis if the market regulator allowed it. Now there is this step coming in that they have to obtain an order from the Delhi High Court. That will definitely derail the process?
I do not understand why Sebi has to tell them to obtain an order from the Delhi High Court for making an open offer. The legislature has delegated the powers to Sebi being the regulator to monitor the open offer. Now if they in their wisdom think that yes open offer has to be allowed, they should allow it and they should not push the can and say that please go and get an order from Delhi High Court.

To my mind, it is not correct of Sebi to ask IHH to go back and get an approval from the Delhi High Court for making an open offer.

To stay with the story, Daiichi Sankyo has also thrown its hat in the ring, It is planning to move the high court saying it is against the open offer. What about the retail investors, minority investors and how important is this case for becoming a precedent?
It’s true the retail investors are suffering because they have been kept in limbo. They do not know as to what is going to happen in relation to the open offer and in relation to how the things are going to pan out. Now once somebody has made an open offer, it has to get allowed to be completed. There is no stay order from Delhi High Court, there is nothing which prevents the open offer to go ahead. Why should the minority shareholders, rather the retail shareholders be allowed to suffer like this? Not allowing the open offer to proceed is completely against the interest of the retail shareholders.

So what do you think now would be the legal recourse that the company can resort to? Would it just be obtaining this order from the Delhi High Court or would they have to take any other course of action?
Yes they will have no choice. If I were advising IHH, I would have said that go ahead with the open offer and in case Sebi stops you from doing that, go to SAT and get an order to say that since you have complied with all the provisions, I am under an obligation to make an open offer. This regulator is not allowing me to make an open offer, it is against the interest of the retail shareholders.