Sebi seeks details on Asian Paints deal

MUMBAI, Aug 19: The Securities and Exchange Board of India has sought details about the sale of 9.1 per cent equity holding by the Chokseys...

MUMBAI, Aug 19: The Securities and Exchange Board of India has sought details about the sale of 9.1 per cent equity holding by the Chokseys to multinational ICI Plc. Even though the market regulator has not yet officially launched any enquiry, SEBI sources said discussions are on with the Asian Paints management about the intricacies of the transaction.

“We’ve asked for some details from the company,” said Pratip Kar, senior executive director, SEBI. The enquiry is mainly to check for possible violations of the insider trading law, if any. It has also asked for details of the deal from Kotak Mahindra Capital, National Stock Exchange and DSP Merrill Lynch.

A section of marketmen feels that Atul Choksey’s sudden decision to sell shares to Morgan and Capital International amounted to insider trading. The Chokseys were aware of the change in equity holding before the sale. This may attract insider trading provisions. However, senior Sebi officials refused to comment about the insider trading angle.

After the deal with Morgan Stanley and Capital International was called off last Thursday, the Chokseys were approached by Kotak Mahindra Capital Company to buy off his stake in one spot transaction. Kotak sold off the same block of shares to ICI Plc on Monday.

According to Ashwin Dani, promoter-director of Asian Paints, they had not received any communication from SEBI till Tuesday afternoon. “But I will not be surprised if SEBI sends us any notice about the insider trading probe,” he said.

He said they met ICI officials on Monday and the management gave them a patient hearing. “We will decide about ICI’s stake in the Friday’s board meeting,” Dani added. Meanwhile, the Asian Paints share fell on Tuesday, a day after ICI plc announced that it had bought a 9.1 per cent stake in the company, on fears of continuing management instability.