NEW DELHI: Xchanging Technology Services India on Tuesday resolved a case with Sebi of an alleged breach of adoption standards regarding the payment of 65.24 lakh as a settlement fee.
The settlement decision came after the company filed an application with the regulatory authority to resolve the matter without admitting and rejecting the alleged violations.
According to the tripartite order, the applicant also agreed to pay the difference in the event of an adverse outcome in connection with a complaint pending with the Securities Appellate Tribunal (SAT).
In May 2016, a merger agreement between Hewlett Packard Enterprise (HPE), Computer Sciences Corporation (CSC) and DXC Technology Company was signed. The transactions envisaged under the agreement were completed in April 2017.
Under the agreement, CSC merged with a wholly owned subsidiary of DXC, which resulted in DXC becoming CSC’s parent company.
CSC is the parent company of XChanging Solutions and owned 78.77 percent of the voting share capital. DXC indirectly acquired 78.77 percent of the voting share capital of the target company through CSC.
The public announcement that the applicant as acquirer (together with DXC and CSC as jointly acting persons) had to make in May 2016 was not made until November 2017, according to Sebi.
After the open offer, the proportion of the promoter and the promoter group including the applicant in XChanging Solutions rose to 90.8 percent. This violated the Minimum Requirements for Public Participation (MPS) and was met with a delay.
According to the settlement request, the applicant notified Sebi’s internal committee that a complaint is pending on the SAT. It was submitted by an investor and mainly contested the open offer price issue.
The applicant proposed the revised settlement terms and “undertook to pay the difference in the event that the outcome of the complaint was not submitted in favor of the applicant and the offer price contested in the complaint was increased, subject to the outcome of further legal disputes to settle the defaults … “it stated.
The applicant transferred the settlement amount and undertook to pay any difference in the event that the outcome of the complaint lodged with the court, according to which the regulatory authority had dismissed the case, was unfavorable.
