The Competition Commission of India (CCI) has allowed Zuari Fertilisers and Chemicals to go for an open offer to acquire up to 26 per cent stake in Vijay Mallya’s Mangalore Chemicals and Fertilisers Ltd (MCF).

In July, SEBI had given a go-ahead to rivals Saroj Poddar’s Zuari and Sailesh Mehta-run Deepak Fertilisers & Petrochemicals Corporation to go for the acquisition bid. Zuari is slated to play a white knight to Vijay Mallya helping him to retain control over MCF against the hostile acquisition bid from Deepak. Mallya’s UB group controls 22 per cent in MCF.

No movement

Though the CCI approval (to Zuari) came on Monday, neither camp made any move on Tuesday.

The reasons are not difficult to fathom. Following withdrawal of its gas connection earlier this fiscal, Deepak’s manufacturing is seriously impacted, leaving a telling impact on the balance sheet. The market is abuzz with talk that the sudden change in its business outlook may have a bearing on the company’s open market acquisition plan.

For Zuari, the biggest setback might have come in the form of a “wilful defaulter” tag on Vijay Mallya imposed by Kolkata-based United Bank of India earlier this month.

A wilful defaulter is not allowed to be on the board of any company. But according to Zuari’s existing contract with the UB group, Mallya will continue to be chairman for the next five years.

PTI adds: Meanwhile, a minority shareholder of Mangalore Chemicals and Fertilizers has petitioned SEBI against UB Group and Saroj Poddar-led Zuari Group launching an open offer to buy additional stake in the company. Nagreeka Foils, which holds 3.5 lakh shares in MCFL, in its letter to the market regulator, has also sought removal of Vijay Mallya as director on the company’s board. “The continuation of Vijay Mallya, a wilful defaulter, as a promoter or director of MCFL, will prejudice our rights as a minority shareholder of MCF,” Nagreeka Foils said in a letter to SEBI on September 11.

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