ACCELYA Open offer - Full Interest must be paid

 SMALL INVESTORS’ WELFARE ASSOCIATION

    Email : SirenBajao@gmail.com 

TEXT OF LETTER SENT TO SEBI

The interest being offered is 12.99  instead of about Rs.70 for the delay of about 8 months caused by the acquire

This interest is only for the period of 46 days gap between the PA date and the DPS date as was given in the DLOO. They have not included any interest for the period of delay caused by their action. This is absolutely wrong and incorrect.  The offer is delayed for about 8 months for which they are solely responsible and must pay interest for this period. The interest for the period of delay has always been given to the investors by the acquirers.  This has been  the practice all along.

I would like to believe that it is the failure of the merchant banker at the first stage  to guide the client- Acquirer to offer full interest. 

Interest has not been provided for the period of litigation on the premise that such delay was before the issuance of OBSERVATION LETTER.

The term "Observation letter" is nowhere mentioned in SEBI regulations. This is a term which has cropped up during the processing and use. In asking an acquirer to pay interest, the idea is that the investors should not suffer because of intentional or unintentional delay due to the acquirer's action. At the same time, the time the acquirer should not suffer for the delay and taken for processing at SEBI's end. Therefore, it is assumed that SEBI has taken the time till observation letter is issued and  delay beyond the date of the  observation letter shall always bear interest. 

For the period of  litigation, especially started by the acquirer, they always had have to pay interest. This was the case in FEDERAL MOGIUL or other long delayed cases of NIRMA- SHREE RAMA MULTI-TECH or PRAMOD JAIN-GOLDEN TOBACCO. Admittedly, all these litigations were started  after the issuance of OBSERVATION LETTER. 

In the case of Accelya, the acquirers started   litigation even before the issuance of the observation letter. This cannot spare them the responsibility and liability to bear with the consequences of litigation started by them.   If this is allowed unchecked, it may open the flood gates of litigation, may be just to delay the payment against the offer.

I have no hesitation in urging SEBI strongly, to direct the acquirer to pay interest for the delay caused by their  avoidable litigation. The least you can ask is to pay interest for the period between 14.2.20 ( the date when SEBI appointed the Valuer) to 17.07.20, the date of SAT order. There cannot any dispute or argument that this period of delay was caused absolutely by the Acquirer.