Frensensius Kabi clears SAT hurdle, gets interim relief

Fresenius Kabi's the pharma major which was caught in Sebi’s crosshairs on account of failing to comply with minimum public shareholding (MPS) norms, today secured interim relief from the Securities Appellate Tribunal SAT). Acknowledging the company's attempts to delist, SAT today allowed the pharma major a chance to make a renewed representation to Sebi, reports CNBC-TV18’s Ashmit Kumar.

Fresenius Kabi's delisting drive got a major boost from the Securities Appellate Tribunal (SAT) on Monday. Also read: Time to cherry pick infra, IT, pharma stocks: CIMB The company had in an attempt to comply with the minimum public shareholding (MPS) norms had brought down its promoter shareholding from 90 percent to 81 percent but subsequently had done a U-turn and had sought Securities and Exchange Board of India (Sebi's) permission for delisting. However, that permission had not been granted and it is in the context of this decision that we saw Fresenius Kabi head towards the SAT. Today, SAT in its order very clearly stated that the company seems to have made genuine attempts towards delisting and that it has made significant progress. SAT pointed out that out of 25 conditionalities more than 15 have been complied with. It also observed that at this rate it shouldn’t take more than about two months for the delisting process to be completed. Therefore, on the back of these findings SAT concluded that Fresenius Kabi stands on a different footing than the other companies that have failed to comply with the MPS norms. In the context of these observations SAT has allowed Fresenius Kabi to approach the market regulator with a more detailed representation seeking an extension for the delisting process. Meanwhile, SAT in its order has also observed that the market regulator will have time of four weeks to come out with its final order subsequent to the first personal hearing. SAT said that the order that comes out needs to be both reasonable as well as rational. Moreover, though Fresenius Kabi has secured some relief it will have little bearing on the other companies, as SAT has pointed out that the facts and circumstances of this case are unique. Speaking of other companies who have failed to comply with the MPS norms in associated developments; out of the 105 companies that failed to comply with the MPS norms 21 have initiated steps to comply with these MPS norms. Therefore, it does appear that the market regulators actions are yielding some results.