Under pricing of ABB Power Products and Systems India Limited –Open Offer

SMALL INVESTORS’ WELFARE ASSOCIATION

Regn No. F-72744 (M)

With a legacy of 25 years of investor protection services

Email : SirenBajao@gmail.com

 

TEXT OF LETTER WRITTEN TO SEBI

The above referred Open offer is full of irregularities and CHALAKI designed to short-change the small shareholders. You must have received many complaints against the offer. We have been approached by several complainants with a request to give a proper representation to SEBI. Today, we wish to highlight only some glaring issues and irregularities. Shall revert to you once again, sometime later, with more detailed representation.  

1.      The primary transaction on a global level was executed on 17^th  Dec.2018, Accordingly as per regulation 13(2)(e)  the PA was due within 4 days i.e. 21^st Dec.2018. Public Announcement (PA) has been actually  made only on 30^th  March, 2020

2.      The initial Share Purchase Agreement (SPA) was done on 17^th  Dec.2018, and was duly notified to SEC (Securities Exchange Commission) immediately. But it was not notified to the Indian Stock exchanges or SEBI at the same time. Perhaps in the minds of the acquirer, SEC and SEBI is not at par. They must be asked why SEBI was not informed at the same time as SEC?

3.      On an arbitrary date; 24^th   Mar. 2020 Valuation is done for the purpose of Open Offer. This is the date after the Stock market had hit lower circuit and valuation world over were at 6 years low because of Global Corona Pandemic.

4.      The transaction has not been disclosed in a transparent manner. Price that has been attributed to the Indian Power Grid unit (ABB Power Product) has not been disclosed.

5.      The target company does not qualify  for the test of “frequency” as it was not in existence on the date of   transaction for takeover. The global level share purchase agreement (SPA) between ABB and Hitachi was executed on 17^th  Dec.2018, ABB Power Products Limited was formed on 19^th February, 2019. NCALT  approved the  scheme of demerger on 27.11.2019 and the demerger record date was fixed on 23.12.2019^[1].

6.      The frequency of trading in shares should be tested for then existing pre-demerger company. It cannot be done for any non-existing company. The  company then in existence was ABB India Limited and was frequently traded as per the definition given in these Regulations.

7.      The first basic price should be determined by a simple formula; ABB India’s  Pre-demerger price minus post demerger price will give the price for the demerged unit. Accordingly the value will be approx. 1400 Price of ABB.

There are many more and serious points which will be notified to you later.

 

List of dates  or activity schedule:

Share Purchase Agreement	17.12.2018
Hitachi Limited had made an immediate News Release in Tokyo, Japan	17.12.2018
ABB Ltd. made necessary disclosures before the Securities Exchange Commission	17.12.2018
ABB Power Products and Systems India Limited was incorporated	19.02.2019
NCLT sanctioned the scheme of demerger	27.11.2019
Record date for Spin off	23/12/2019
Allotment of shares to the shareholders of ABB India Limited	24.12.2019
The intimation for the apportionment of Cost of acquisition for the purpose of determining post demerger cost of acquisition as per income tax act	07.02.2020
Competition Commission South Africa’s  approval to the said transaction	27.03.2020
Public Announcement	30.03.2020
Valuation date	23/03/2020
Valuation report date	24/03/2020
Competition Commission of India’s approval to the said transaction	07.04.2020
European Commission’s approval of acquisition	29.05.2020
Detailed Public Statement	01.06.2020
Draft Letter of Offer	09.06.2020
BSE Press Release	01.07.2020
Consummation of transaction	01.07.2020
Corrigendum in Financial Express	03.07.2020