SAT dismisses International Paper appeal in AP Paper case
MDT/PTI 13 September 2012

The two-member SAT bench found that the International Paper and promoters of AP Paper Mill have failed to provide SEBI with sufficient evidence to justify payment of non-compete fee to 15 promoter entities

 
New Delhi: The Securities Appellate Tribunal (SAT) has dismissed a petition by International Paper against a Securities and Exchange Board of India (SEBI) direction concerning payment of non-compete fee by it to erstwhile promoters of Andhra Pradesh (AP) Paper Mill, which has been acquired by the global company, reports PTI.
 
The SAT, however, gave a four-week reprieve International Paper to allow it to appeal before the Supreme Court.
 
International Paper, a global paper and packaging firm, had entered into an agreement in March 2011 to acquire 53.46% stake from the promoters of AP Paper for Rs1,112 crore.
 
As part of the agreement, an exclusivity fee of Rs21.20 per share was also to be paid to the promoter group sellers.
 
However, SEBI said that only five out of 20 promoters of Andhra Pradesh Paper Mill were entitled for non-competence fee and asked International Paper Company to revise the offer price for the rest 15 promoters.
 
The two-member SAT bench found that the buyers and sellers in the deal have failed to provide SEBI with sufficient evidence to justify payment of non-compete fee to 15 entities.
 
"We, therefore, do not find any merit in the appeal and the same is dismissed with no order as to costs," said SAT.
 
Earlier, on 11 August 2011 passing an interim order SAT had directed the company to go ahead with the public offer after depositing a sum in an escrow account calculated on the basis of Rs130.73 per share.
 
"The appellants may now pay the balance amount to the shareholders who had offered their shares in the open offer, within a period of six weeks from the date of this order," the tribunal said.
 
SAT, however, on the request of the acquirers has put its order in abeyance as they wanted to explore possibilities to approach the Supreme Court in order to challenge the order.
 
International Paper Company along with IP Holdings Asia has made an open offer to acquire additional stake in Andhra Pradesh Paper Mill.
 
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