The offer period ended on August 26, with Bhushan gaining a 58.81% stake of Bowen Energy. The panel says it is still making enquiries into the association between Bhushan and India’s Savni Holding, which holds a 16.66% stake of Bowen.

The panel took issue with valuations in an independent report released on July 26 which valued Bowen’s shares at 3.53-5.51c each, well below the 14c per share Bhushan bid in the preceding fortnight.

Within the independent report by WHK Horwath Corporate Finance was a “Revised Independent Valuation of the Coal Tenements held by Bowen” from private company Minnelex.

“The panel considered that the circumstances were unacceptable because, among other things, there were material deficiencies in Minnelex’s 23 July 2009 report regarding some of the values found, some of the logic involved and compliance with ASIC Regulatory Guide 111 and the VALMIN Code,” the panel said in its decision.

“As a result of the deficiencies in Minnelex’s 23 July 2009 report (and hence the expert’s report) and information deficiencies, the acquisition of control over Bowen shares has not taken place in an efficient, competitive and informed market, and shareholders in Bowen were not given enough information to enable them to assess the merits of the Bhushan bid.”

The panel has ordered Bowen to foot the bill to procure a new independent expert report, which must be submitted to the Australian Securities & Investments Commission for review.

If the takeover offer is not deemed to be fair or reasonable, the panel has ordered Bhushan to release the new independent report to the market and offer shareholders who took part in the 14c bid the right to buy back the shares at that price.

Before its takeover offer, the Indian steelmaker had a 22.23% stake of Bowen.

In September last year, Bhushan agreed to purchase 1.75 million shares of the explorer at 32c per share.

Various press reports have indicated some Bowen shareholders were not satisfied with the offer, with shareholder Macrae Holdings appealing to the Takeovers Panel.

An Australian Securities Exchange spokesperson previously told ILN the bourse referred shareholder complaints about Bowen to the ASIC due to matters relating to corporations law.

Bowen has not yet declared a maiden JORC resource for any of its coal projects, but it does hold Queensland permits adjacent to areas held by major coal companies, including BHP Billiton, Anglo Coal and Macarthur Coal.

Bowen made an announcement in July in response to a shareholder enquiry relating to a Reuters report in March.

The report suggested that Bhushan’s chief financial officer, Nittin Johari, who is also a Bowen director, viewed some of Bowen’s acreage as holding 1 billion tonnes of thermal and coking coal.

Bowen said Bhushan denied the comments were made as quoted in the news report.

Bowen wholly owns coal permits EPC 1084 and EPC 1085 and has a 40% stake in EPC 930.

The explorer has a full stake in permit applications EPCA 1197, EPCA 1083 and EPCA 1259 and minor stakes of 10-15% in four other coal permits in Queensland.

Shares in Bowen traded up as much as 47.4% to 14c yesterday, but are currently at 13c today.