sebi:WTM/AB/CFID/CFID-SEC3/30299/2024-25
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Facts / Headnote
Prima facie finding of material RPTs without shareholder approval and improper business allocation; interim directions to LIL to test materiality on aggregate annual basis, obtain shareholder approval under Regulation 23(4) if threshold exceeded, cooperate with NSE-appointed registered valuer for valuation of business foregone/received under JV&SHA, place report before Audit Committee/Board and disclose summary with management comments; effective immediately until further orders.
Provisions invoked
- s. 19
Regulations
- Reg. 23
- Reg. 2(1)
- Reg. 23(4)
- Reg. 23(1)
Parties
- Linde India Ltd.
Holding
RPTs entered by LIL with Praxair India Pvt. Ltd. in CY21, FY23 (15 months) and FY24 (first six months) prima facie satisfy the materiality threshold under Regulation 23(1) LODR and required prior shareholder approval under Regulation 23(4); the product/geographic business allocation under the JV&SHA prima facie amounts to transfer of resources to a related party without valuation/shareholder approval, warranting interim remedial directions including independent valuation.
Full text
Interim Order in the matter of Linde India Ltd. Page 2 of 19 4. LIL was a subsidiary of BOC Group Ltd., an unlisted UK-based company. Linde AG (a German company) acquired BOC Group Ltd. in 2006. Consequently, BOC India Ltd. changed its name to LIL in February 2013. 5. In 2018, there was a global merger between Linde AG and Praxair Inc. This resulted in the formation of Linde Plc., which is a NASDAQ-listed entity. Linde AG and Praxair Inc. owned 50% each of the new company. Praxair Inc. had an unlisted subsidiary in India – PIPL, which was also predominantly engaged in the production and supply of various gases. Pursuant to the merger, Linde Plc had two subsidiaries operating in India – (i) LIL which is a listed entity wherein it held 75% of the beneficial ownership and (ii) PIPL which is a 100% step-down subsidiary.
Interim Order in the matter of Linde India Ltd. Page 3 of 19 a. Failure of LIL in obtaining shareholder approvals for material related party transactions (“RPTs”) undertaken with PIPL. b. Irregularities alleged in respect of a business agreement entered by LIL with PIPL wherein certain products and geographic areas were allocated between the companies.
Interim Order in the matter of Linde India Ltd. Page 4 of 19 require prior approval of the shareholders through resolution and no related party shall vote to approve such resolutions whether the entity is a related party to the particular transaction or not:
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Source: SecMarx — sebi:WTM/AB/CFID/CFID-SEC3/30299/2024-25. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.