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No breach of norms in ACC takeover, rules SEBI

Our Bureau

MUMBAI, July 20

THE Securities and Exchange Board of India (SEBI) has ruled that there is no violation of SEBI (Substantial Acquisition of shares and Takeovers) Regulations, 1997, in the manner in which Gujarat Ambuja Cements Ltd (GACL) and the Ambujas took over ACC Ltd without making a public offer.

In a complaint to SEBI, it was alleged that the Ambujas had acquired shares exceeding 15 per cent, if shares held by the notified person and said to have been attached by the Special Court were excluded from the total voting capital of ACC.

SEBI, in its order, observed, inter alia, that shares which carry voting rights do not cease to be so merely because the same have been suspended or attached. Thus, the Ambujas had acquired 14.5 per cent of the equity share capital/voting capital of ACC, which is below the threshold limit of 15 per cent specified under Regulation 10 of SEBI Regulations.

`` Hence, there is no violation of Regulation 10,'' SEBI's official statement said.

It further observed that neither could the Tatas be described as promoters of ACC, nor could it be said that the appointment of two or four directors of the Ambuja Group leads to acquisition of control at ACC by the Ambujas.

It also said, the Ambujas do not hold controlling shares in ACC and there is no evidence or material to show management control of ACC by them. Hence, Regulation 12 is not attracted, SEBI said.

However, SEBI has said, if as a result of further developments which enable the Ambujas to exercise directly or indirectly control over ACC, then the matter may have to be examined afresh at that stage.

The issue of strategic alliance or monopolistic market power may draw application of other laws such as MRTP Act or Companies Act, but the same will not amount to control as defined under SEBI Regulations or violation of these regulations.