Indiabulls Real Estate Ltd and Embassy Group Scheme of Amalgamation

The minority investor’s appeal
D. Dharanish of Vijayawada, a minority shareholder in IBREL, holding 20,100 shares, first appealed before the Securities and Exchange Board of India (Sebi), and later before the NCLT Chandigarh against the proposed merger.

However, the shares changed hands as Dharanish sold his entire shareholding in IBREL to another investor named Tejo Ratna Kongara, in December 2022 who is now taking forward the applications and litigations filed by Dharanish.

Dharanish first filed an application before the Sebi in September 2022 and later appealed before the NCLT Chandigarh.

The appeal majorly hovered around three points:

1. Why the details of the internal structuring of NAM Estates have not been disclosed to the shareholders of IBREL, which is a crucial set of information as the post-merger shareholding of the merged entity majorly depends on that restructuring.
2. The minority investor also questioned the due diligence followed by IBREL when it comes to valuation of the entities being merged and calculation of the swap-ratio of the merger.
3. The minority investor also highlighted that there is a major pending litigation pertaining to a land parcel leased by Embassy East Business Park, which was not disclosed in the information memorandum by IBREL.

The minority investor’s appeal states that the independent valuation reports, the scheme of merger, or any other document doesn’t disclose the assets and details of the activities carried out by these entities and the basis of the valuation on which the swap-ratio has been calculated.