The Supreme Court of India has delivered a significant ruling in favor of Smartworks Coworking Spaces Limited , dismissing a civil appeal filed by a New Delhi-based NGO and issuing a stern warning against the presentation of false evidence.

Key Highlights

• The Supreme Court dismissed the civil appeal filed by the NGO Infrastructure Watchdog against Smartworks Coworking.
• The Court warned of serious consequences for attempting to mislead the judiciary with fabricated documents.
• This ruling upholds the earlier order of the Securities Appellate Tribunal (SAT).

Background of the Case

The case stems from a petition filed by the NGO Infrastructure Watchdog before the Securities Appellate Tribunal (SAT). The NGO claimed that the Securities and Exchange Board of India (SEBI) had not acted on its complaints against Smartworks. However, SAT dismissed this appeal, citing a lack of merit.

Following the SAT's dismissal, the NGO escalated the matter to the Supreme Court. The apex court's decision now brings a conclusive end to what Smartworks describes as a "malicious attempt" against their Initial Public Offering (IPO).

Supreme Court's Verdict

In its order, the Supreme Court stated:

1. The court heard senior counsel appearing for both parties at length.
2. The court was not inclined to interfere with the impugned order passed by the Securities Appellate Tribunal, Mumbai.
3. The Civil Appeal was accordingly dismissed.

Implications for Smartworks

Despite these legal challenges, Smartworks' IPO was met with strong investor demand. The issue was oversubscribed 13.45 times overall, with the Qualified Institutional Buyers (QIB) category seeing a 24.4 times oversubscription. This robust response underscores the strong institutional confidence in Smartworks' business fundamentals.

Neetish Sarda, Managing Director & Founder of Smartworks, commented on the verdict: "This verdict by the Hon'ble Supreme Court brings a conclusive end to a malicious attempt against our IPO and also reaffirms Smartworks' reputation for transparency, governance, and integrity. With the IPO successfully completed and our shares actively trading, investor confidence speaks for itself."

About Smartworks Coworking Spaces Limited

Smartworks is India's largest managed office platform, with approximately 12 million sq. ft. across 56 centers in 15 cities. The company operates in India and Singapore, serving as a one-stop workspace solution for over 700 clients, including Fortune 500 companies, corporates, MNCs, and startups.

The company's business model focuses on leasing large bare shell properties in prime locations, transforming them into fully serviced, tech-enabled campuses with various amenities such as cafeterias, sports zones, convenience stores, gyms, crèches, and medical centers.

This Supreme Court verdict not only validates Smartworks' business practices but also reinforces the importance of maintaining integrity in corporate disclosures and legal proceedings.

Smartworks Coworking Spaces Limited has successfully completed the dilution of its stake in Clean Max DOS Private Limited, a move that has significantly altered its shareholding position. The company has reduced its stake from 24.82% to 9.08%.

Transaction Details

The stake dilution has been finalized with all formalities and compliances completed. Smartworks received a net consideration of INR 99,07,807 from the transaction.

Buyer Information

The buyer in this transaction is Clean Max Enviro Energy Solutions Limited, formerly known as Clean Max Enviro Energy Solutions Private Limited. It's important to note that the buyer does not belong to the promoter or group companies of Smartworks Coworking Spaces Limited.

Regulatory Compliance

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Smartworks has provided the necessary disclosures regarding this transaction. The company has confirmed that:

1. The transaction does not fall under the category of related party transactions.
2. Clean Max DOS Private Limited was not considered an associate of Smartworks as per the applicable Indian Accounting Standards (Ind AS), despite being an associate under Section 2(76) of the Companies Act, 2013.

Market Impact

The stake dilution is a significant move for Smartworks Coworking Spaces Limited, potentially impacting its investment portfolio and strategic positioning in the market. However, the full implications of this transaction on the company's financials and operations remain to be seen in the coming quarters.

Investors and market analysts will likely be keeping a close eye on how this stake reduction affects Smartworks' future performance and strategic direction in the coworking space industry.