Sri Vishnu probe — Sebi misses deadline again

Sri Vishnu was earlier controlled by Raasi Cement which was then owned by BV Raju. However, India Cements acquired Raasi after a protracted and hostile takeover battle. However, just before Raasi was acquired by India Cement, Raju transferred the ownership of 39.5 per cent Raasi stake in Sri Vishnucement to nine other companies. Raju later made an open offer for 20 per cent more stake in Sri Vishnu.

MZ Khan, a shareholder of Raasi who filed the petition against the open offer by Raju in the high court, has said that four of the nine companies have a common registered office at the time of incorporation and BV Raju was the promoter director of two of the nine companies. He further alleged that several friends and relatives of BV Raju and the then Raasi management were in active control of the nine companies just before the share transfer.

Khan alleged that the share transfer violated the Sebi takeover code. Raju resigned from some of the purchaser companies to avoid disclosure requirement of the interested directors, Khan said in the petition, adding that the nine companies which got the stake in Sri Vishnu are the front companies of Raju.

What has angered India Cements is the decision of the Rajus to buy the stake of institutions in Sri Vishnu at a rate of around Rs 100 per share whereas Raasigot only around Rs 10 per share. Sebi is understandably in a predicament as it had earlier approved the the share transfer and open offer. If it approves the investigation report submitted by its officers, it will be forced to make its earlier decision null and void.