The Hindu Business Line : SAT sets aside SEBI order against Holcim

Mumbai, May 29 The Securities Appellate Tribunal (SAT) has set aside the SEBI order against Holcim (India) Private Ltd. SEBI had slapped a fine of Rs 25 crore on Holcim in August 2006 for the alleged violation of the takeover code, while acquiring shares in Associated Cement Companies Ltd (ACC).

The market regulator had alleged that Holcim indirectly acquired 76.01 per cent of the equity share capital of Everest Industries Ltd (EIL), a listed company, in April 2005 in the process of acquiring 34.71 per cent stake in ACC.

Listing Agreement

SAT has held that Regulation 11(2 A) of the takeover code gets triggered only where the acquisition results in lowering of public shareholding below the limit prescribed for the listing agreement, whereas in the instant case even with indirect acquisition of 76.01 per cent of EIL, the public shareholding in that company continued to be more than 20 per cent – the limit prescribed in the listing agreement for continued listing.

SAT said it cannot accept the reasoning of the adjudicating officer of SEBI establishing that the company had violated the takeover regulations. It described the reasoning as “perverse”.

Accordingly, SAT held Regulation 11(2 A) doesn’t apply to the case and hence no question of violation. Also SAT disapproved of the other argument that Regulation 10 of the takeover code had been violated, on the ground that the violation of Regulation 10 has not been alleged in the show-cause notice and the Appellant had not been put on notice for such a violation.