N.L. Lakhanpal, Member. - The appeal was taken up for final disposal with the consent of parties.

2. The appellants had made a public announcement on 10-4-2002 for acquisition of shares in Hindustan Zinc Limited (hereinafter referred to as ‘HZL’ or ‘the target company’) pursuant to the appellants participation in the Government of India Public Sector Disinvestment Programme. Since HZL was a listed company, the provisions of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (hereinafter ‘Takeover Code’) were attracted and a letter of offer, pursuant to the public announcement was issued to all the share- holders of the target company as required under the Takeover Code. The shareholders who tendered their acceptance in response to the appellants’ open offer included the following 9 persons, not resident in India.

3. It is common ground that the entire time table laid down in the Takeover Code for such public offers was followed by the appellants except in the matter of payment of consideration to the above 9 Non-Resident persons. In respect of this category, payment of consideration was required to be effected by 25-7-2002 i.e., within 30 days from the closure of offer while the payment was actually made to 8 out of these 9 persons on 4-9-2002 i.e., after a delay of 40 days and to the remaining one person on 3-10-2002 i.e., after a delay of 69 days.On this issue of delay in payment to these 9 Non-Resident shareholders, the appellants’ case is that this category of persons were prohibited from transferring any securities under the Foreign Exchange Management (Transfer or Issue of Security by a person Resident outside India) Regulations, 2000 (hereinafter ‘FEMA Regulations’) notified under the Foreign Exchange Management Act, 1999 except with the prior permission of the Reserve Bank of India. SEBI’s case as made out in the impugned order is that the appellants were bound to make payment of the consideration to all the shareholders who tendered their shares in response to the open offer by 27-5-2002 under Regulation 22(12) and any failure to do so for any reasons whatsoever, requires payment of interest to the shareholders for the period of delay. SEBI has accordingly passed the following impugned order :

"9.1 In view of the findings made above and in exercise of the powers conferred upon me under sub-section (3) of section 4 read with sections 11 and 11B of SEBI Act read with regulations 44 and 45 of the Regulations, I hereby direct the Acquirers to pay interest @ 10 per cent p.a. to the India Fund, Inc., Metdist India Holdings Limited, Krishna Kumar Rajamani, Lal Tolani, Nazir Ghulamhusain, Saurin J. Shah, Anuja Rohit Wariawalla alias Anuja Kaushik Sheth and Merlyn Lee for delay of 40 days from 26-7-2002 to 4-9-2002 and to Societe Generale for delay of 69 days from 26-7-2002 to 3-10-2002 in making payment of the consideration amount to the aforesaid NRI/OCB/FII shareholders, as in terms of sub-regulation (12) of regulation 22, the payment of consideration to the said NRI/OCB/FII shareholders of the Target Company was to be made within 30 days of the closure of the offer. Since delayed payment of consideration amount for acquisition of shares of the Target Company has adversely affected interest of said NRI/OCB/FII shareholders of Target Company, they shall be paid amoun