SEBI guideline on payment mechanism to hit ISL delisting

India Securities, which is a holding company through which ESSAR held stake in Vodafone ESSAR, de-listing may have hit a road block. SEBI has laid out guidelines to ESSAR on payment mechanisms, cash distribution or capital distribution to the shareholders in the de-listing of ISL, reports Kritika Saxena of CNBC-TV18.

According to our sources, ESSAR has confirmed that SEBI has instructed the company to follow a certain set of payment mechanism as SEBI says that the current payment mechanism does not comply with the delisting regulation, and if followed, ESSAR will not be able to achieve 90% ownership in ISL”. “There is no clear basis of proposed payment mechanism provided by SEBI and they have approached concerned parties to correct those particular anomalies and merchant bankers are in the process of releasing shares.” said ESSAR. Shares which haven't been accepted under the delisting offer they have written to SEBI to correct this particular issue and allow payments as per delisting regulations. ESSAR is awaiting a response from SEBI and say that they have completed the delisting offer in full compliance with SEBI regulations. However, if SEBI does not reply than this may mean that SEBI would not be able to give its entire clearance to ESSAR. SEBI’s reply to ESSAR is crucial at this point in time. Also watch the accompanying video.