L038;T says no violation of law to Grasim146;s notice

They said the company board would continue discussion on the demerger proposal at the next meeting as it remained inconclusive on the December 7 meeting. A fresh date for the board meeting is yet to be decided, they added. According to market sources, the proposal includes selling of more than six per cent stake to UK-based financial investor CDC.

While some directors received the legal notice served through Grasim8217;s lawyers, Mulla 038; Mulla, on December 6, which was a holiday for Eid, the company noticed it only the next day when the board was scheduled to meet later in the day, officials said.

The notice stated that any discussion on demerger of cement business at the board meeting would result in serious dispute and possibility of a long drawn out litigation. 8216;The board should not discuss the demerger proposal at its meeting,8217; the Grasim notice said.

L038;T has also decided to respond to the notice through its solicitors, the officials said. The Birlas are under fire for their public offer of shares at a lower price than what they paid to the Ambanis to buy latter8217;s 10.4 per cent stake.

The market regulator Sebi is already investigating the Birlas for violation of Sebi8217;s takeover code. The L038;T board discussed the demerger proposal on December 7, but the board decided to put off a decision on it until the next meeting.

The demerger proposal broadly entails L038;T holding a stake of about 70 per cent in the demerged entity, with about 7 per cent with a financial investor.