In 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.

At 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 in EIL.

As 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.

Instead 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 On SEBI''s advise, this open offer proposal was withdrawn.

Subsequently, 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.

Holcim 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.

SEBI 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.

Holcim 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.