Colour Chem Ltd. (the target company) is an Indian company and its shares are listed on the Bombay Stock Exchange and National Stock Exchange. Clariant International Ltd., (Clariant) is a Swiss company. It is a hundred per cent subsidiary of another Swiss company viz. Clariant AG. Hoechst AG (Hoechst) is a German company. Ebito Chemiebeteiligungen AG(Ebito) is a Swiss company in which Clariant held 49 per cent shares and Hoechst held 51 per cent shares. Pursuant to an agreement entered into in mid 1997 between Hoechst and Clariant, Hoechst’s German specialty chemicals business was sold and transferred to Clariant. In terms of the said Agreement Hoechst and Clariant entered into negotiations for the purchase/transfer of 583708 equity shares of Rs. 100 each of the target company then held by Hoechst, which constituted 50.1 per cent of the paid up capital of the target company. A Stock Purchase Agreement for the purpose was prepared on 21-11-1997. In this context Clariant sought exemption from the compliance of the requirement of making open offer to the shareholders of the target company in terms of the provisions of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (the Takeover Regulations). The exemption as sought for was not granted by the respondent. Since Hoechst had existed from the specialty chemicals business, it was decided by Hoechst to sell off the shares of the target company held by it to Ebito, a company floated on 19-5-2000 as a special purpose vehicle. On 13-10-2000 Hoechst sold and transferred the shares to Ebito. It has been stated that as a consequence of the scheme of financial reorganisation/reconstruction effected, Ebito which held 50.1 per cent of the share capital of the target company, became a 100 per cent subsidiary of Clariant. It was in the said context the respondent received a complaint alleging that the appellants had violated the provisions of the Takeover Regulations as they acquired 50.1 per cent shares/voting rights and control in the target company without making public announcement in accordance with the regulations. The respondent responded to the complaint and conducted an enquiry into the matter. After the enquiry, the respondent came to the conclusion that the appellants had actually acquired the control over the target company on 21-11-1997. The impugned order dated 16-10-2002 was made in the light of said findings. After discussing the factual position and the relevant provisions of the Takeover Regulations it has been recorded in the order that "Thus, when the Acquirer, in the instant case, expressed its intention to acquire the 50.1 per cent shares of the target company by way of entering into Purchase Agreement with Hoechst on 21-11-1997 it constituted an intention to acquire indirectly the control over the target company and thus triggered the regulations and therefore, the obligation to make Public Announcement arose on that day which was to be made within four working days of 21-11-1997, i.e. the date of entering into the said agreement." It has been further observed in the order that the "Acquirer (the appellants) has violated regulations 10 and 12 read with sub-regulations (1) and (3) of regulation 14 as the Acquirer had acquired 50.1 per cent shares/voting rights and control in the target company, without making public announcement to acquire shares/voting rights or control of the target company in accordance with the said regulations." Having come to the said conclusion the respondent vide its order dated 16-10-2002 directed the appellants to make public announcement as required in terms of regulations 10 and 12 of the Takeover Regulations, taking 21-11-1997 as the reference date for calculation of offer price. The public announcement was directed to be made within 45 days of the date of the order. In the order it has also been stated that :

". . . In terms of sub-regulation (12) of regulation 22, the payment o