Dissemination Board removal upheld where share buy-back was later permitted and already implemented under SEBI framework.

The commentary addresses a challenge to removal of a company from the Dissemination Board on the ground that its share buy-back was not permitted under the then-existing SEBI circular framework. It notes that SEBI later issued a circular dated 25 July 2017 permitting the buy-back to provide an exit to public shareholders. Because the buy-back had already been implemented, payments had been made, and the challenge was brought after substantial delay, the Tribunal found no illegality in the buy-back arrangement or in the resulting removal from the Dissemination Board. The challenge to the NSE order was therefore rejected.

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Issues: Whether the removal of the company from the Dissemination Board was illegal on the ground that the buy-back of shares by the company was not permitted under the SEBI circulars.

Analysis: The appellant challenged the NSE order removing the company from the Dissemination Board and contended that the company could not buy back shares under the SEBI circular framework then in force. The Tribunal noted that SEBI subsequently issued a circular dated 25 July 2017 permitting the company to buy back shares to provide an exit to public shareholders. The buy-back had already been acted upon, payments had been made, and the challenge was raised after a substantial delay. In these circumstances, the Tribunal found no illegality in the buy-back arrangement or in the consequent removal of the company from the Dissemination Board.

Conclusion: The challenge to the NSE order was rejected and the appeal was dismissed.

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