SC to SVG: Pay small shareholders Rs 100 crore

In upholding the landmark judgment passed by Madras high court (HC), the Supreme Court has ordered

S V Global

(

SVG

) Mill, which was carved out of the 200-year-old textiles major Binny, to pay Rs 100 crore to minority shareholders to buy them out.

The minority shares are owned by

S Natarajan

, one of the original promoters of Binny, and his associates. “This court, under Article 142 of the Constitution, directs that a sum of Rs 100 crore be paid, to the respondents (associates of Natarajan) for the buyout of all the respondents’ shares in the company,” justice R F

Nariman

and justice A M Sapre said in their order. The shares, which aggregate to about 42.4 lakh shares or around 19% of share capital of the company, should be purchased within a period of nine months from the date of the order.


The SC made it clear that “there will be no triggering of the Sebi Takeover Regulations” as a result of the share purchase ordered by the court. “We also make it clear that this order does not amount to shares being transferred inter vivos, nor can the payment for the shares be treated as deemed dividend. On payment, the share capital of the company shall stand reduced by virtue of our order,” the judges said.