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Herbertsons case drags on

New Delhi, Oct. 17: The Supreme Court today posted to November 3 further hearings on the Vijay Mallya-Kishore Chhabria dispute over control for liquor major Herbertsons, the third-largest maker of spirits in the country.

A division bench of Chief Justice V. . Khare and Justice S. B. Sinha, however, did not issue any interim stay on the two open offers that have been made to the public by the Mallya and Chhabria groups to buy up their shares.

On Thursday, the Mallya group raised the offer price for the Herbertsons shares to Rs 215 per share. The Chhabria camp, whose open offer opened today, has time till Monday to revise its open offer price. The Chhabria camp's open offer for 20 per cent of the Herbertsons' equity or 19,04,465 shares works out to Rs 210.74 per share.

The Securities and Exchange Board of India (Sebi) has filed two civil appeals against UB chairman Vijay Mallya and his rival Kishore Chhabria which would be clubbed with similar appeals and special leave petitions (SLPs) both by the UB group and the Chhabrias.

The judges asked both Mallya and Chhabria to respond to the Sebi appeal within a week, while posting the matter to November 3 for further hearings. Fali Nariman, senior counsel for the UB group, and Kapil Sibal, counsel for the Chhabria camp, had a sharp argument over Nariman's demand for a stay on the tendering of shares by the shareholders in response to the two open offers.

Sibal argued that there was no question of tendering shares as it was a competitive bidding where the shareholders would benefit from the rival's intention to buy the shares.

The apex court had already issued notices to Sebi on the SLP filed by the UB group challenging the securities appellate tribunal order asking Chhabrias to make an open offer to shareholders of Herbertsons with October 27, 1994, as reference date to calculate the offer price.

Basically, three issues have been framed in the case: maintainability of the UB petition; Sebi to answer what would happen if it was found that the acquisition of 19.1 per cent of the shares in Herbertsons by Chhabrias were void and, thirdly, whether there could be ex-post facto offers.

The UB group contended that the August 1 decision of the tribunal directing the Chhabrias to make an open offer would change the management structure of Herbertsons, in which UB has a 23.9 per cent stake.

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