has ordered the Indian subsidiary Swiss cement major Holcim,
which controls ACC and Gujarat Ambuja Cements (GACL),
to a pay a fine of Rs25 crore for its failure to make
an open offer to the shareholders of Everest Industries
Limited (EIL). This is the single-largest monetary penalty
imposed on an entity by SEBI.
January 2005, Holcim had acquired a majority stake in
Ambuja Cements India Limited (ACIL), which held a minority
stake in ACC. This was followed by an open offer to
the shareholders of ACC by Holcim and others acting
in concert. Subsequent to the open offer, Holcim''s beneficial
interest in ACC went up to 34.71 per cent.
that point ACC held a more than 76-per cent stake in
EIL, one of the largest manufacturers of asbestos cement
products in the country. As Holcim controlled nearly
35 per cent of ACC, it indirectly held a majority stake
per SEBI regulation on takeovers and substantial stake
acquisitions, Holcim was required to make an open offer
to acquire a minimum of 20-per cent stake from minority
shareholders of EIL.
of coming out with an open offer, Holcim made an agreement
with Accurate Finstock to sell ACC''s 76-per cent stake
in EIL. Accurate Finstock also filed the documents with
SEBI for making an open offer for 20 per cent of EIL
at Rs147 per share. On SEBI''s advise, this open offer
proposal was withdrawn.
another entity called Everest Finvest acquired a 50-per
cent stake in EIL from ACC. This was followed by an
open offer at the rate of Rs184 per share of EIL.
contented that it had decided to stay out of the cement
fibre products business and hence it had no interest
in acquiring EIL. It also contended that the agreement
with Accurate Finstock to sell the 76-per cent stake
in EIL was signed before its own open offer for ACC.
EIL''s shareholders in any case were given an exit option
through the open offer made by Accurate Finstock and
subsequently by Everest Finvest.
also rejected Holcim''s contention that the acquisition
of ACC was part of a global arrangement. Except Holcim,
all the other parties involved in the case are companies
registered in India.
has been directed to pay the fine within 45 days. The
company can file an appeal with the Securities Appellate
Tribunal (SAT) within this period.