A few weeks ago, we discussed SEBI’s proposals to overhaul the delisting regime. Evident from that discussion were difficulties faced in the current delisting regime. Some of those difficulties have surfaced in an order issued by SEBI yesterday involving the delisting of AstraZeneca Pharma India Limited. SEBI’s order alleges a concerted action between the controlling shareholder of the target and a large minority shareholder (who is a financial investor). SEBI has therefore called upon the stock exchanges to closely monitor the delisting process, and to ensure that it has been fair and transparent.
This case offers some further insight into the types of issues previously discussed, including possible influence by large minority shareholders who can play a dominant role in the delisting. At the same time, it must be noted that this order is only an interim one, and SEBI has sought to examine the issues further.