India’s Securities Appellate Tribunal (SAT) has dismissed ITC’s appeal challenging the sale of Leela hotels to Brookfield Asset Management.
ITC holds 7.92% interest in Hotel Leela Venture. It approached the SAT after the Securities and Exchange Board of India (SEBI) dismissed its plea that the sale of Hotel Leela Venture’s assets to Brookfield Asset Management should not be allowed given that it was related party transactions.
SEBI had allowed JM Financial Asset Reconstruction Company to vote on the deal.
JM Financial Asset Reconstruction Company owns 26% in Hotel Leela Venture.
The SAT, in its order, stated: “After the order was pronounced, ITC made plea that they need time to appeal in the Supreme Court and hence they want two weeks time for the same. The counsel for the respondents opposed the same, the oral request thus is rejected.”
In March, Hotel Leela Venture announced the sale of four of its hotel properties along with a land asset to Brookfield for Rs39.50bn.
This transaction, however, faced a roadblock after the ITC and the Life Insurance Corporation of India, both of which are minority stakeholders in Hotel Leela Ventures, informed the SEBI that that the JM Financial Asset Reconstruction Company was a related party and therefore could not vote on the board resolution approving the transaction.
Meanwhile, the SAT also vacated a previous earlier stay order, which directed Leela not to declare the postal ballot results until the matter was before it.
It also rejected ITC’s appeal to suspend the tribunal”s order for two weeks. If the appeal had been accepted, the cigarette-to-hospitality conglomerate ITC would have two weeks time to appeal before the Supreme Court.