Financial Daily from THE HINDU group of publications
Saturday, Oct 26, 2002
Regulatory Bodies & Rulings
Markets - Open Offers
SEBI to speed up enquiry into L&T insider trading
MUMBAI, Oct. 25
THE Securities and Exchange Board of India has said that it would expedite and try to complete the investigations into the possibility of insider trading in Larsen & Toubro (L&T) shares before the open offer by Grasim for L&T shareholders opens.
Speaking to newspersons here, the SEBI Chairman, Mr G.N. Bajpai, said "SEBI is investigating into the possibility of insider trading in L&T shares and would try to complete the process before the open offer opens".
Grasim has made an open offer to the shareholders of L&T for acquiring 20 per cent stake at Rs 190 per share and offer opens on December 9.
Mr Bajpai said that SEBI had never delayed any investigations and in this case also it would do at the earliest.
The SEBI Chairman's statement, to complete the investigation before the open offer, gains importance as the market regulator has received complaint to stall the open offer at Rs 190 as the price is much lower than Rs 306 per share Grasim paid to Reliance group to acquire over 10 per cent stake in L&T.
However, Mr Bajpai said the marker regulator couldn't stop the open offer, as Grasim has not violated any regulation.
Asked whether the market regulator would look into the changes in takeover regulations after the L&T case, he said, "stock market is a dynamic world and SEBI looks at every event. In this case also we will certainly look into the possibility of any changes that can be made".
In an effort to further improve the corporate governance practices, the SEBI is considering for companies to make disclosure on the health aspects of their CEOs.
"The corporate governance committee has received suggestions from the business chambers for disclosure on the health aspect of CEO and when the matter is taken up we will consider this also".
Two panel reports at next meet
THE SEBI board will take up reports of the Kania Committee on demutalisation of stock exchanges and J.R. Varma Committee on derivatives during the next meeting.
Mr Bajpai said both these issues would be taken up before the SEBI board in the next meeting. However, he said the date and place for the meeting had not been decided as yet.
On the J.R. Varma report on derivatives, the SEBI board is likely to take up the issue of adding more securities to futures and options list, reducing the contract size and introduction of physical settlement of stock futures and options.
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