Bombay HC sets aside AAR order on Tech Mahindra

Tech Mahindra will breathe easy now as the Bombay High Court (HC) set aside an order by the Authority for Advance Ruling (AAR) that raised questions whether Sebi guidelines were flouted by the company in order to go public, reports CNBC-TV18's Ashmit Kumar 

Tech Mahindra, through a sale purchase agreement with a partly-owned Mauritian subsidiary, had transferred shares to it so as to meet obligations.

Also read: Polaris rises 4.4% as Tech Mahindra may buy IT services biz

Sebi guidelines do not allow a company, with outstanding obligations over shares to be listed. It had held that without this arrangement, the company would not have been listed until 2010. The company went public in 2006.

The move by Tech Mahindra was cited as illegal and circumvention of Sebi guidelines by the AAR. However, the Bombay HC on Thursday dismissed this order and remanded the matter back to the AAR. It will now dwell on the taxability of the share-purchase agreement in question.