The Bombay High Court on Thursday allowed the Securities and Exchange Board of India's plea for four week's time to submit a fresh, modified application in the Sterlite Industries demerger case to strengthen its argument. The case has been adjourned to next month.
Sebi counsel said the regulator has withdrawn its original application to file the fresh one.
The department of company affairs also sought time from the judge to go through the application made by the income tax department before filing its own affidavit.
There is a provision in the Companies Act, 1956, wherein if 10 per cent of the shareholders (or 100 in number) feel that majority shareholders are not operating in the interest of the minority, they can appeal to the DCA.
The department will thus need to examine the issue and appoint an officer to verify the valuation before filing an affidavit.
The I-T department decided to act as an intervenor in Sterlite Industries' proposed demerger.
Its decision to block the open offer scheme follows its attachment of 54 per cent of the company's shareholding belonging to Twin Star Holdings due to non-payment of dues.
The department filed a motion against the demerger as it would result in assets of Rs 3,800 crore being taken out of the company and transferred to the unlisted Sterlite Copper Ltd, leaving Sterlite Industries a shell company.
Sebi had filed its affidavit last week contesting that shareholders of Sterlite Industries ought to be allowed to exit as per the regulator's delisting guidelines.
The company has undertaken the demerger route provided for under Sections 391 and 394 of the Companies Act, by just getting the court's approval and thus effectively bypassing the Sebi guidelines.
The regulator's guidelines stipulate that the company allow the shareholders to exist at a price arrived at by the reverse book-building route.
Small investors who moved the High Court in April have gathered support from financial institutions against the proposed split in Sterlite's business -- hiving off the copper business and retaining the aluminium conductor business, power transmission line and other non-metal related assets in the parent company.