NewsCorporate ActionsSebi Halts Par Drugs & Chemicals' Rs 95 Crore Slump Sale to Promoter EntitySebi Halts Par Drugs & Chemicals' Rs 95 Crore Slump Sale to Promoter Entity
Sebi has issued an interim order stopping Par Drugs and Chemicals Ltd's planned Rs 95 crore slump sale to Phal-Jig Fine Chemicals Pvt Ltd, citing irregularities. The regulator has instructed NSE to appoint an independent valuer and a merchant banker for a fairness opinion, both due within 15 days. Par Drugs is restrained from disposing of assets until further notice. The company's market capitalization has reportedly declined by 70% since the announcement of the slump sale.
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The Securities and Exchange Board of India (Sebi) has issued an interim order halting Par Drugs and Chemicals Ltd's planned Rs 95 crore slump sale of its core business to Phal-Jig Fine Chemicals Pvt Ltd, a promoter-linked entity. The regulatory body cited several irregularities in the proposed transaction, raising concerns about potential detriment to public shareholders' interests.
Key Points of Sebi's Intervention
- Transaction Details: The Business Transfer Agreement, signed on February 14, aimed to complete the slump sale by September 20.
- Regulatory Concerns: Sebi identified irregularities in the valuation process, shareholder communication, and voting procedures.
- Market Impact: Par Drugs' market capitalization has reportedly declined by 70% since the announcement of the slump sale.
Sebi's Directives
- Independent Valuation: The National Stock Exchange (NSE) has been instructed to appoint an independent valuer for re-examining the transaction.
- Fairness Opinion: A merchant banker is to provide a fairness opinion on the deal.
- Tight Timeline: Both the valuation and fairness opinion are due within 15 days.
- Asset Freeze: Par Drugs and its management are restrained from disposing of any assets until further notice.
Implications for Shareholders
The regulatory intervention comes as a significant development for Par Drugs' shareholders. With the company's market value already substantially reduced, Sebi's actions aim to protect the interests of public shareholders and ensure fair valuation of the company's core business.
Next Steps
Investors and market participants will be closely watching the outcomes of the independent valuation and fairness opinion. These reports, expected within the next two weeks, will likely play a crucial role in determining the future of the proposed slump sale and its potential impact on Par Drugs and Chemicals Ltd's stakeholders.
Shareholders and potential investors are advised to stay informed about further developments and any additional directives from Sebi regarding this matter.
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