SEBI to hear Mallya, Chhabria on June 14

MUMBAI, JUNE 4: The Securities and Exchange Board of India SEBI will hear both KR Chhabria and UB Group Chairman, Vijay Mallya on June ...

MUMBAI, JUNE 4: The Securities and Exchange Board of India SEBI will hear both KR Chhabria and UB Group Chairman, Vijay Mallya on June 14 to sort out the Herbertsons takeover battle. The Mumbai High Court has already stayed Chhabria8217;s nomination of directors on the company8217;s board which the latter is planning to appeal to the Supreme Court as soon as the court reopens after the vacation in July.

In its order, the Mumbai High Court has asked both sides to wait for the SEBI8217;s verdict on the issue. The SEBI had earlier postponed hearing of the case as the regulator was waiting for the green signal from the High Court. With the High court asking the SEBI to take a decision, the regulator is keen to expedite the hearings.

Chhabria, who has made a hostile bid on the company, will be heard on the same day by the SEBI chairman D R Mehta. This would be last hearing before the market regulator gives its verdict. Therefore, the hearing assumes significance for both the warring parties as its verdict would seal the fate of either promoter. SEBI officials say that they are also waiting for the copy of verdict passed by Mumbai High Court on the matter.

Chhabria had acquired more than 49 per cent equity in Herbertsons by buying shares in the open market. With Mallya claiming that even he has over 45 per cent stake in the company, the tussle over management control is getting murkier with both parties making claims and counter claims.

In the annual general meeting held in Mumbai for the fiscal 1998, Chhabria had moved special resolutions to nominate his directors in place of UB nominated directors. With the holding cost of shares going up, a verdict from SEBI will help both parties financially who have wagered their entire resources in the legal battle. Due to the financial constraints, an out-of-court settlement cannot be ruled out, sources said.