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Mount Everest Mineral Water Limited was the target company and Mr. Vinod Sethi and Foresight Holdings Private Limited were its promoters. Tata Tea had acquired Mount Everest in 2007, buying a stake of 24.15 per cent at Rs 140 a share, which
aggregated to Rs 43.54 crore. This triggered an open offer, as shareholding was in excess of 15 per cent.
Tata Tea had paid the non-compete fee to ensure that the promoters do not participate in the same business for a period of one year. The share purchase agreement entailed payment of a non-compete consideration of Rs 3 crore to the promoters of Mount Everest in lieu of their agreeing not to compete with the company after the acquirer made the investment.
The Sebi said Tata Tea should pay the amount as non-compete consideration to the promoters to other shareholders as well, who had tendered shares in the open offer, with interest at 10 per cent for the delay in making the payment.
Feeling aggrieved by the aforesaid directions, the appellant has filed the appeal.
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