AstraZeneca Pharmaceuticals (AZP) AB, Sweden whose third attempt to delist its Indian arm from National Stock Exchange (NSE) and Bombay Stock Exchange(BSE), has been put on close watch by the country's market regulator Securities and Exchange Board of India (SEBI). The company said it has followed all relevant regulations at every stage of this exercise.
Responding to an e-mailed query from Pharmabiz on a recent SEBI directive to the two national bourses to monitor the delisting exercise, AstraZeneca Pharma's representative said, "We note the announcement from SEBI and confirm that at every stage of the offer for sale (OFS) and delisting processes, AZ has complied in all respects with the relevant SEBI regulations."
The Indian subsidiary AstraZeneca Pharma India Ltd (AZPIL) had earlier tried to delist in 2004 and 2010 but failed in its efforts twice. In 2004, it tried to buy back shares through the Reverse Book Building route, but abandoned the plan saying that the price of each share at Rs. 3,000 was too high. In the second instance, the shareholders defeated the attempt again. In the meanwhile, the company had also fought a public interest litigation (PIL) from retail shareholders in the Kerala High Court. Currently, AZPIL scrip is moving around Rs. 1,150 on BSE.
On June 20, 2014, AZPIL announced that a majority (99 per cent) of its public shareholders had approved the proposal to delist from the NSE and BSE.
Interestingly, of the 460 total public shareholders, 13.02 lakh or 86.5 per cent of the shares are vested with 131 shareholders. Whereas dissenters numbering 330 hold 13.47 lakh or 2.02 lakh shares which AZPIL announced after the voting for delist on June 20,2014.
On June 24,2014, SEBI issued an order and cited suspicious patterns in the company's practices related to de-listing, especially the OFS that the company initiated in May last year.
SEBI said, “AZPIL’s OFS and delisting process raises suspicion that the Hong Kong-based Elliott group might be working in concert with the promoters of AZP AB, to facilitate the delisting of AZPIL.
The SEBI order said, "Bombay Stock Exchange Ltd and National Stock Exchange Ltd shall closely monitor the entire delisting process of AZPIL and allow the final delisting of its shares only after satisfying themselves that the process has been fair and transparent."
Further, the order from SEBI also said, "The promoters of AstraZeneca Pharma India shall finally purchase shares from public shareholders in the delisting offer only after seeking approval of the BSE and the NSE."
According to the June 24, 2014 SEBI order, 94 per cent of the shares through OFS ended up with Hong Kong-based Elliott group through its associates. Elliott later raised its stake in the company to 15.52 per cent by buying shares in the market.