This renowned global optical and digital solution provider is compelled to pay $2.1 million after the company failed to procure the products for agreed quantities at the agreed price from Shin Etsu’s chemical.
At 11:48 a.m., Sterlite Technologies Ltd shares were quoted at Rs 157.25 per share, up 1.35 percent from the previous close price. The company has a market capitalization of Rs 6,269 crore.
According to the company regulatory filing, ShinEtsu has accused Sterlite Technologies of not procuring agreed quantities under the Contract at the agreed price.
As per the Singapore International Arbitration Centre arbitration award (SIAC) dated 24 Feb 21, Sterlite Technologies Ltd is liable to pay damages in the sum of $2,112,969 with simple interest at 5.33% p.a. on the damages from 31 Dec 19 until full payment.
The award was filed in the Singapore Courts, however, Sterlite Technologies Ltd (STL) did not prevail in the Singapore Courts. Thereafter, ShinEtsu filed for execution of the Award in the Bombay High Court. Sterlite Technologies Ltd filed a detailed reply seeking refusal of enforcement of an award,
However, on 5 June 23, the Court granted ShinEtsu’s Petition and directed that the aforementioned arbitral judgment dated 24 February 21 be enforceable and executable as a decree of this Court.
STL filed a Special Leave Petition (SLP) to the Supreme Court on 4 September 2023, contesting the Bombay High Court’s Order dated 5 June 23. However, on November 24, 2023, the Supreme Court rejected Sterlite Technologies Ltd’s SLP.
Sterlite Technologies revenue has declined by 15 percent year on year, from Rs 1,768 crore in Q2FY23 to Rs 1,494 crore in Q2FY24. During the same period, Net profit also decreased by 21 percent from Rs 38 crore to Rs 30 crore.
As per the recent shareholding pattern, the company promoter holds a 54 percent stake, while Foreign Institutional Investors hold a 5.45 percent stake and retail investors hold a 38.6 percent stake in the company.
Sterlite Technologies Ltd is a leading global optical and digital solutions company providing advanced offerings to build 5G, Rural, FTTx, Enterprise, and Data Centre networks.
Written by Omkar Chitnis
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