Linde India's Related Party Transactions Case: Supreme Court Refuses Stay On Valuation Exercise

The Supreme Court on Monday refused to stay a direction of the Securities and Exchange Board of India, whereby the National Stock Exchange has been directed to conduct a valuation exercise of certain related party transactions of Linde India Ltd.

The top court said that the Securities and Appellate Tribunal is already disposed of the plea and therefore the court's intervention is not warranted at this stage.

Notably, the plea is listed before the SAT on Oct. 15.

Appearing for Linde India, senior advocate Abhishek Manu Singhvi told the court that if the valuation of a public listed company is published on stock exchanges, there will be a ripple in the market.

However, the court clarified that SAT in its order has said that the NSE and the stock exchange appointed valuer will be bound by the unpublished price-sensitive information confidentiality norms.

The court iterated that SEBI directed the valuation exercise as it would help it for all further purposes and proceedings. In addition, it said that any information divulged by the valuer will be kept confidential by the markets regulator.

Regardless of everything else, Linde India is required to make all disclosures on stock exchanges, Singhvi said.

The court was not move by Linde India's plea and therefore refused to intervene in the dispute.

The dispute pertains to allegations of related party transactions against Linde India Ltd. in connection with Praxair India Pvt. and Linde South Asia Services Pvt.

SEBI, while directing an NSE-led valuation exercise of the said transactions, expressed concern over Linde India's attempt to proceed with transactions that had previously been rejected by shareholders, despite legal opinions obtained by the company.

The markets regulator pointed out that these actions could not be justified, highlighting that a valuation exercise would have clarified whether such decisions required shareholder approval.

In addition, the regulator has instructed Linde India to assess the materiality of future related-party transactions based on threshold norms.

Linde India is contesting the valuation exercise before the Securities Appellate Tribunal.

But since the main plea contesting the valuation exercise is pending before the appellate tribunal, while there was no stay on the exercise, prompted Linde India to approach the top court.