BAJORIA MAY HAVE SLIPPED UP: SEBI

You win some. And you lose some. Even though the regulator has not found evidence to suggest that Arun Kumar Bajoria bought more than 15 per cent in Bombay Dyeing, the regulator is learnt to have found evidence that he slipped up in disclosing that he’d acquired 5 per cent in the company. In fact, the regulator has brought even the role of the Calcutta Stock Exchange under scrutiny, as the exchange was sent a letter by Mr Bajoria but chose not to take cognizance of it. Soureces said that Sebi’s takeover norms make it mandatory on an acquirer to inform the company when an acquisition of more than 5 per cent has been made. The company is then required to disclose this information to the stock exchanges. In this case. While Mr. Bajoria claims that he informed Bombay Dyeing when he bought more than 5 per cent shares in the company, the latter has held that it received no intimation. Mr. Bajoria submitted a certificate of posting to the regulator when he was questioned, but Bombay Dyeing maintained that it received no such letter. At that point of time, it was discovered that Mr Bajoria has also informed the Calcutta bourse but the letter was discovered after much digging. Even though Mr Bajoria was not required to disclose the details of his acquisition to the stock exchange, he decide to do so. This aspect too was looked into in great detail by the regulator. Sebi officials are not commenting on the issue at all. Sources said that the investigation report is almost ready and Mr. Bajoria and CSE are both likely to be asked to explain their position before any further action is taken. A decision on whether a show cause notice needs to be issued will be taken over the next few days. The issue of disclosing details of acquisitions on time haad snowballed into a major controversy after Bombay Dyeing alleged that they had not been given details on time. It is also felt that this is price sensitive information and failure to disclose it has serious repercussions. At a meeting last month, the Bhagwati panel on takeovers even took a decision to further tighten norms. It was decided that acquisition details would be disclosed at the5, 10 and 14 per cent levels and would be disclosed to both the company concerned as well as to the stock exchanges. Source: The Economic Times Dated: 8 December 2000

SEBI TO REWORK GUIDELINES FOR INDIRECT TAKEOVERS

BP AMOCO’S global take-over of Foseco plc is creating ripples here in India. Sebi is planning to specify norms for exemption from the takeover code for acquirers who indirectly gain control of a business but do not intend to retain it and instead sell it. Sebi’s takeover code does not factor this situation which has now arisen for the first time with BP Amoco seeking exemption from the code as it intends to sell Foseco India and wants the new acquirer to make the open offer to its shareholders. BP Amoco bought out Burmah Castrol globally and through this takeover also indirectly gained control of Castrol India and Foseco Idia. While BP Amoco has made an open offer to shareholders of Castrol India, it has on Friday filed and application with sebi to seek an exemption from doing the same for Foseco India. This is because BP Amoco does not intend keeping Foseco and wants to sell it. “A final decision on their application would be taken by the takeover panel which decides on exemption requests. Nevertheless, we feel that in the event of grant of an exemption in such cases there would need to be some guidelines which would specify the time duration within which the company or business in question must be sold to get an exemption from the take-over code,” said a top Sebi official. “ The issue will also be taken to the Bhagawati committee on the take-over code for its view as this would require changes to the code,” said the official. Sebi wants to set the rules for companies which acquire management control of two or more entities through one acquisition and then intend selling off some of these entities. BP Amoco has held the view that it should not be made to make an open offer as the entity which buys the company from it, would in any case be doing so. Earlier, Sebi’s take-over panel had given the exemption to BP Amoco from making an open offer to shareholders of Castrol and Foseco provided they took shareholder approval in an extra-ordinary general meeting. Moreover, Sebi has said that BP Amoco itself should not vote in the EGM. Since the difference in the trading price and the open offer price worked out under a Sebi formula was fairly high, there was little possibility of the motion going through with out BP Amoco’s own vote. Therefore, BP Amoco decided to go ahead and make the open offer to shareholders of Castrol. On Thursday, BP Amoco official told ET that they would not like to make an open offer to shareholders of Foseco as this would make a “mockery” of the system, with two entities making open offers. Source: The Economic Times Dated : 9 December 2000

Alpic, SREI, Apple Finance, Apple Credit to have a 4-way merger

Alpic, SREI, Apple Finance, Apple Credit to have a 4-way merger which will create the largest lease finance company in India with an asset base of over 2500 crores. The merger is aimed at creating the largest lease financing NBFC in India and to acquire a critical mass, which will bring them economies of scale. The four companies specialize in different areas. Apple credit and Apple finance specialize in Vehicle finance. Alpic specializes in financing of medical equipment while SREI is predominantly into financing infrastructure equipment.