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Thursday, Dec 11, 2003

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HSBC Sec cleared in Modi Rubber open offer case

Our Bureau

Mumbai , Dec. 10

THE Securities and Exchange Board of India (SEBI) today absolved HSBC Securities of any negligence while acting as merchant bankers to the public offer made in June 2001 by Mr V.K. Modi and others to acquire shares representing 35 per cent equity capital of Modi Rubber Ltd.

The capital market regulator had probed whether HSBC Securities had complied with all regulations while acting as merchant banker to the offer, which had run into a muddle when LIC, after giving its shares in the offer, backed out saying that its officials who tendered the shares were improperly authorised. Incidentally, the SEBI Chairman, Mr G.N. Bajpai, was heading LIC at the time.

LIC subsequently moved the Bombay High Court seeking to get its shares back.

In an order dated December 9, Mr T.M. Nagarajan, member, SEBI, said: "There is no denying the fact that this is an exceptional case, riddled with complications of litigations. Based on totality of consideration of the given facts and peculiarity of circumstances of the case and the conduct of the merchant banker in navigating the public offer, it would be but reasonable to conclude that HSBC Securities, as merchant banker, has not acted negligently."

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