Besides HSBC Securities, which acted as the merchant banker, the capital market watchdog also reprimanded India Star (Mauritius) Ltd which had made the open offer. However, Sebi ruled that "a direction in the nature of ordering the acquirer to make another public offer is not warranted".

Sebi Whole Time member, Prashant Saran, said in his 30-page order: "I reprimand the acquirer (India Star) and the merchant banker (HSBC Securities and Capital Markets Pvt Ltd) for failing to reach the standards of disclosures." The ruling came on a complaint filed by one Amit Bhagvatprasad Barot in 2012 that India Star failed to make certain disclosures while making the open offer for acquiring additional shares of Global Offshore Services.

Barot had held shares of Global Offshore Services (formerly Garware Offshore Services) but had not participated in the open offer. In his plea, he had sought a fresh open offer. "I note the allegation that adequate disclosures, with respect to the persons in control of the acquirer, was not made. However, it has not been shown that the shortfall in disclosure would have changed the decision of the shareholders who had tendered shares in the open offer," Saran said.

Taking note of inadequate disclosures, Sebi cautioned that "repeated violations by either of them would be viewed very seriously."

The open offer closed in 2008 and Barot lodged a complaint in 2012, which is almost after 4 years years of completion of the offer. Though there is no limiation period for such complaints to be made to Sebi, a period of 21 days is provided to the shareholders.

Sebi said that even if a complaint is received after one day of closure and completion of open offer formalities, the same would create a huge difficulty in undoing the process that is already complete. Further, it could also be possible that third party rights would have been created in the meantime.

Accordingly, Sebi said that it may not be appropriate or reasonable to allow the relief as sought for by the complainant, who requested the regulator to direct the acquirer to make another open offer and provide an opportunity to the shareholders to take an informed decision whether or not to tender their equity shares.

India Star made an open offer in March 2008 after increasing its stake in Global Offshore to 21.56 per cent through conversion of optionally convertible debentures.