Wimco Ltd., is a public limited company incorporated in India. It is mainly engaged in the business of manufacture and sale of a broad range of safety matches. The shares of the company are listed on the stock exchanges at Mumbai, Delhi, Calcutta, Kanpur and also on the National Stock Exchange.

Swedish Match AB (Appellant No. 1), a company incorporated in the Kingdom of Sweden, is the holding company of Swedish Match Singapore Pte. Ltd. (Appellant No. 2). The entire paid up capital of Swedish Match Singapore Pte. Ltd. is held by Swedish Match AB. It is a private limited company incorporated in Singapore. The said Swedish Match Singapore Pte. Ltd. in turn is the holding company of two other Singapore companies viz. Haravon Investments Pte. Ltd. (Haravon) and Seed Trading Pte. Ltd. (Seed). These companies viz. Swedish Match AB, Swedish Match Singapore Pte. Ltd. Haravon and Seed are described as Swedish Match Group (the Acquirers). The Acquirers held 52.11 per cent shares (i.e. 46.18 per cent by Haravon and 5.93 per cent by Seed) in Wimco Ltd. (the target company). Two companies viz. AVP Trading P. Ltd. (AVP) and Plash Foods P. Ltd. (Plash) are stated to be the Indian promoters of the target company. These two companies incoporated in India, reportedly belong to one Jatia Group (Jatia group companies). They together held 24.11 per cent of the share capital of the target company. (i.e. AVP holding 6.03 per cent and Plash holding 18.08 per cent).

The Acquirers and the Jatia Group, were thus holding 76.22 per cent shares of the target company. It has been stated that these two groups were in joint control of the target company.

The Acquirers (through Swedish Match Singapore Pte. Ltd.) acquired 1,13,82,800 shares representing 21.89 per cent of the share capital of the target company from the Jatia Group (i.e. 16.41 per cent from Plash and 5.48 per cent from AVP) in September, 2000 at a price of Rs. 35 per share of the face value of Rs. 10. With the aforesaid acquisition the Acquirers’ holding in the target company increased from 52.11 per cent to 74 per cent and the Jatia Group’s holding reduced from 24.11 per cent to 2.22 per cent. The public shareholding remained unchanged at 23.78 per cent.

The Respondent on noticing that the Acquirers acquired 21.89 per cent shares of the target company, over and above their holding of 52.11 per cent shares issued a show-cause notice to them 28-1-2002. In the show-cause notice it was alleged, inter alia, that acquisition of 21.89 per cent shares of the target company by the Acquirers, prima facie attracted the provisions of regulation 10 and regulation 11(1) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (the 1997 Regulations) and thereby attracted penal action under the 1997 Regulations, and the Securities and Exchange Board of India Act, 1992 (the Act). They were called upon to show cause as to why one or more or all action(s) under regulations 44 and 45(6) of the 1997 Regulations and section 11B of the Act, should not be initiated against them. The Appellants answered the show-cause notice. They also made oral and written submissions before the Chairman, Securities and Exchange Board of India (the Chairman). The Chairman, thereafter made the impugned order on 4-6-2002. By the impugned order, it was held that by acquiring 21.89 per cent shares of the target company without making a public announcement the Acquirers had violated regulation 11(1). In the said context the Acquirers were directed to make a public announcement in terms of regulation 11(1) within 45 days of the passing of the impugned order, taking 27-9-2000 as the reference date for calculation of offer price. The Acquirers were also directed to pay interest @ 15 per cent per annum on the offer price to the shareholders from 27-1-2001 till the actual payment of consideration for the shares to be tendered in the offer.

The Appellants, claiming to be aggrieved by the