Port Louis, Mauritius, Sept. 20, 2012 (GLOBE NEWSWIRE) -- (http://www.myprgenie.com) -- Atyant Capital, as shareholder of Andhra Pradesh Paper Mills (AP Paper), an Indian paper and pulp manufacturer acquired by International Paper Company, is pleased with the recent ruling in favor of the Securities and Exchange Board of India (SEBI; India's equivalent of the United States' Securities and Exchange Commission) over International Paper by the Securities Appellate Tribunal of India, and in doing so, protecting minority shareholder rights in India.
In March 2011, International Paper purchased 53.46% of AP Paper from the control group of AP Paper for Rupees 523 ($9.51) per share aggregating to Rupees 11,118,984,184 ($202 million). In April 2011, International Paper made an open offer to buy another 21.54% of shares from remaining shareholders for Rupees 544.20 ($9.89) per share, under the SEBI takeover code mandating an open offer. However, as supplemental payment, International Paper paid only the control group an additional Rupees 130.74 ($2.38) per share, aggregating to Rupees 2,779,530,000 ($50.5 million) in the form of a non-compete fee (Securities Appellate Tribunal, Government of India, Ministry of Finance, Ref: No. SAT/130/2011/1645).
This extra payment made solely to the control group by International Paper was not permitted by SEBI in an administrative order and SEBI's stand was challenged in the Securities Appellate Tribunal by International Paper. Atyant Capital, and other minority shareholders of AP Paper, filed its own representation supporting SEBI's stand in an intervention application. The Securities Appellate Tribunal's September 2012 ruling on the issue decided that "the payment of non-compete fee is a sham depriving other shareholders of their rightful claims to get a just price for their shares" and upholding the view that the non compete fee paid to select shareholders will also be paid to all public shareholders (Securities Appellate Tribunal, Government of India, Ministry of Finance, Ref: No. SAT/130/2011/1645). Atyant Capital and all minority shareholders thank SEBI for successfully defending shareholder rights in the Indian judicial system.
Pratik Sharma, managing director of Atyant Capital, says "this ruling shows property rights in India are sacrosanct and shareholder rights will be protected." The attorney who advised and represented Atyant Capital, Sandeep Parekh of Finsec Law Advisors before the Tribunal, goes on to add, "this ruling demonstrates that the Indian judicial system and SEBI can be counted on to defend the integrity of India's financial markets and act in the best interest of the minority shareholder."
About Atyant Capital
Atyant Capital manages private investment funds including a fund focused on Indian equities. The goal of the India Fund is to consistently identify the best 10-15 investment ideas among the thousands of publicly traded Indian corporations. The fund's value based investment philosophy stands apart due to its belief in the paramount importance of corporate governance, specifically how management operates with its minority shareholders in mind.
If you would like more information about this topic, or to schedule an interview with Pratik Sharma, please email him at office@atyantcapital.com.
Contact: Pratik Sharma, office@atyantcapital.com, +1 561-953-8939