The Hindu Business Line : LIC bags tainted ACC shares at Rs 170

LIFE Insurance Corporation of India on Friday won the bid for the 1.62-crore block of shares of Associated Cement Companies (ACC) auctioned by the custodian. LIC's winning bid, at Rs 170 per share is at 16 per cent discount to today's closing market price of ACC, of Rs 203.2 on the BSE.

The sale of the shares, which belonged to Harshad Mehta and company, was approved on Friday by the Special Court hearing the Harshad Mehta case.

The approval for the sale went through when the management of ACC, which was given the first right to make an offer for the shares after the highest bid price was ascertained, also expressed disinterest.

"Because the bidder is LIC and because it is at Rs 170 per share, we are not interested (in buying back the shares)," said Mr Goolam Vahanvati, counsel for ACC Ltd. However, LIC was compelled to raise its offer price from its original bid price of Rs 163 per share, when it consented to the custodians' request to the Special Court that LIC quote "any price significantly higher" and "closer" to the market price.

LIC would now hold around 25 per cent stake in ACC, its existing stake in the company being over 16 per cent.

As per the LIC Act, the maximum shareholding the corporation can have in any single company is 30 per cent, although its internal guidelines recommend a cap of 20 per cent.

Market circles today said the "silent winner" in this entire exercise is the Gujarat Ambuja group which has a 14.5 per cent stake in ACC Ltd which currently has no "promoter" so to speak.

"Had a non-financial institution won the bid, it would have been a thorn in its side," said an analyst.

The Harshad Mehta group, however, raised its objection to the sale at the Special Court. One of their objections was that the sale did not fetch the maximum price it could have, being at a considerable discount to the market price; the other being that the group has already approached the Special Court saying that 45 lakh shares in ACC held by them were bought prior to April 1991, and had nothing to do with the scam, and that the sale of these shares which were attached and were being sold should be stayed.

Their application, they said, will be heard in two weeks' time. The Special Court however, did not stay the sale of shares by the custodian.

With respect to the sale of 12.5 lakh shares of Snowcem, also auctioned by the custodian, the hearing has been adjourned to a week later to give the company management time to make their offer.

The lone bidder for this had quoted Rs 10 per share for the block. The share today closed at Rs 17 on the BSE.

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