Investor bodies have cried foul over the inexplicable delay on the part of Birla-owned Grasim Industries in withdrawing the open offer for Larsen & Toubro. Investors Grievances Forum (IGF) has asked for an investigation by Sebi for delaying the withdrawal of open offer. The regulator is said to be seriously looking at the delay. “We would like to know why Grasim did not inform the stock markets as well as investors about such a price-sensitive matter. For 10 days they kept the investors in the dark about the open offer,” an IGF office-bearer told The Indian Express. ‘We understand that the Sebi has written on November 8, to merchant bankers not to go ahead with the open offer for L&T made by Grasim. However, nobody from the company or the merchant bankers made this information public thus playing with small investor’s hard earned money,’ IGF said. The Sebi order became public only on November 18.‘We have asked Sebi to investigate the matter and ask for explanation from merchant bankers and Grasim to find out who have purchased/sold L&T shares between November 8 and November 19,’ IGF said. Though Sebi officials are saying that they are looking into the IGF demands, analysts say that Sebi’s inaction till date in Gujarat Ambuja-ACC case as well as L&T shows that the market regulator can be manipulated by powerful forces. “What stopped Sebi from taking action against Gujarat Ambuja for years now? Instead of setting an precedent the Sebi was sleeping and woke up only after the CBI landed in Mumbai to investigate the L&T case,” asked Pawan Dharnidharka, a Mumbai-based stock market analyst.Meanwhile, Grasim was the second biggest loser among the BSE Sensex stocks on selling pressure, after the company was asked to defer its open offer for an additional 20 per cent equity stake in L&T. By 13:00 IST, the stock of the Birla group company declined by 2.72 per cent to Rs 305.80 on the BSE, registering a volume of 27,058 shares. It finally closed at Rs 308.45.Brokers say if the Sebi probe goes against Grasim, then the company has to make an open offer for the additional 20 per cent stake in L&T at Rs 306 per share (the price at which Grasim acquired 10.6 per cent stake in L&T from Reliance Industries) instead of the current offer price of Rs 190 per share.However, Grasim has appealed to the Securities Appellate Tribunal challenging Sebi’s directive to the cement and VSF maker not to proceed with its open offer for the shareholders of cement, engineering and construction major L&T. The open offer was scheduled to open on 9 December 2002 and close on January 7, 2003.
