French company Schneider Electric drops appeal against SEBI, to re-list on Indian exchanges

In a rare instance, a multinational company will have to return to list in India. This is after French company Schneider Electric on Wednesday decided to withdraw its appeal against SEBI order in the Securities Appellate Tribunal (SAT). 

The Schneider Electric case was the second instance in 2019, where the shareholders of an RSE (Regional Stock Exchange) listed company had moved SAT for ‘poor treatment’ of their complaint by SEBI. Following this, SEBI had asked Schneider to list on the exchanges or give an exit opportunity to its minority shareholders. Then, Schneider had challenged the SEBI order in SAT. But Schneider on Wednesday withdrew its appeal in SAT and decided to list. 

Schneider was listed on the Bangalore and Pune stock exchanges, both of which subsequently closed down. Some shareholders had argued that under a SEBI circular, “it is mandatory for excursively listed companies on RSEs to seek listing on national level stock exchanges and, only for genuine reasons, alternatively, they can provide an exit option to the shareholders as per SEBI Delisting Guidelines/Regulations, after taking shareholders’ approval for the same within a time-frame to be specified by SEBI.” 

In an order on January 19, 2021 SEBI had directed Schneider to either re-list on a nationwide stock exchange or provide an exit opportunity to its public shareholders through the delisting mechanism. This directive came after Regstreet Law Advisors represented a group of minority shareholders holding 9 per cent shares who had filed complaints with SEBI, leading to the order in January 2021.

Schneider had also approached the Bombay High Court in February 2021 requesting the court to set aside the SEBI Order. However, the Bombay High Court dismissed the writ petition on the grounds that challenging a SEBI order should be done before the SAT. Following this, Schneider approached SAT but eventually decided to withdraw its appeal today and agreed to comply with the SEBI Order to re-list the company.