SAT dismisses ITC's plea against Hotel Leela's assets sale

In a major victory for Hotel Leela Venture, the Securities Appellate Tribunal (SAT) rejected ITC's appeal challenging the sale of the hotel's assets.

Cigarette-to-hospitality conglomerate ITC, which holds 7.92 per cent stake in Hotel Leela Venture, had moved the SAT after the Securities and Exchange Board of India (SEBI) rejected its plea that the sale of Hotel Leela Venture's assets to Brookfield Asset Management should not be allowed because of related party transactions.

The securities market regulator had allowed JM Financial Asset Reconstruction Company Ltd, which owns 26 per cent in Leela, to vote on the deal.

The SAT also vacated an earlier stay order whereby it had directed Leela not to declare the postal ballot results till the matter was pending before the tribunal.

Further, it rejected ITC's plea to suspend the tribunal's order for two weeks to allow the conglomerate to appeal before the Supreme Court.

Hotel Leela Venture had in March announced that it was selling four of its hotel properties along with a land parcel to Brookfield. The deal, however, hit a hurdle after the ITC and the Life Insurance Corporation of India who are the minority stakeholders in Hotel Leela Ventures, approached the SEBI alleging that JM Financial Asset Reconstruction Company was a related party and could not vote on the board resolution approving the deal.