Close on the heels of giving clean chit to Aditya Birla Group flagship Grasim Industries on the issue of control of engineering major Larsen & Toubro (L&T) Ltd last week, the Securities and Exchange Board of India (Sebi) has cleared Gujarat Ambuja Cements Ltd (GACL) from takeover violation in a case related to acquisition of shares of Associated Cement Companies (ACC) during 1999-2000.Sebi conclusion to this effect is based on the investigation conducted by it following the Securities Appellate Tribunal (SAT) asking it to investigate the case afresh in October last.Said a Sebi statement, ‘Pursuant to the SAT order, an investigation was launched under chapter V of the Sebi (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 in the matter of acquisition of shares of the ACC Ltd by Ambuja Cement India Ltd from the Tata Group companies. Based on the investigations, Sebi has not found any violation of Regulation 12 of the by the acquirer’.The complaint filed by minority shareholders for the breach of violation of Takeover Regulations 10 and 12 by Gujarat Ambuja Group were investigated by Sebi following the Mumbai High Court dismissal of the review petition filed by them. Sebi, after the enquiry, came to the conclusion that there was no merit in the complaint to warrant any further investigation or enquiry and the complaint was disposed off by the regulator, which was challenged by the complainant in SAT.SAT in its order asking the Sebi to investigate the case afresh said, ‘It was incumbent on Sebi to make a detailed investigation and decide the issue instead of disposing of the complaint in an ’adjudication style’. It appears that no serious efforts were made to find out so as to whether control has been exercised ‘in any other manner’ referred to in the Sebi Takeover regulations. It appears (that the Sebi ruling) was mainly guided by the test that the Tatas had no right to appoint majority of directors as per the Articles of Association and that their shareholding was not sizeable’.
