The Supreme Court, in the matter of Bhushan Energy Limited v. Orissa Sponge Iron and Steel Limited, had directed SEBI to decide on the point of whether conversion of 35,00,000 warrants of Orissa Sponge Iron and Steel held by Bhushan Energy could result in a transfer of management. The initial issue had arisen when OSIL refused to convert the warrants on the ground that the transfer of 'management' due to conversion in favour of Bhushan Energy was against the terms of issuance of the warrants. The concept of 'control' is widely used in statutes and regulations such as the takeover code and has been interpreted repeatedly by various judicial pronouncements. However, there has been no clear threshold by which it can be concluded that a person has control over 'management' or when there is a transfer of 'management'. SEBI’s Whole Time Member distinguished the terms 'control' and 'management' and observed that the incumbent management could continue to be in control even if it lost the largest shareholder status, if a sufficient number of the remaining shareholders was not disinclined towards them. In light of this, the WTM set out two considerations that would be relevant in determining whether there was a transfer of management: (i) the management would have been transferred to any person if that person's shareholding exceeds 50% or, (ii) there is a clear indication that a segment of the remaining shareholders are likely to support the person in forcing the incumbent to quit. It is unclear how voting rights alone can be used to determine if a person has control over the management of a company. However, based on his findings, the WTM went into the factual consideration of whether the conversion would result in Bhushan Energy exercising greater than 50% of the voting rights in the Target. As there was no evidence in support of the same, it was concluded that the conversion of warrants cannot result in a transfer of management to Bhushan Energy.