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No management control of L&T, says AV Birla

BS Corporate Bureau in Mumbai

A day before the Securities Appellate Tribunal is to resume its hearing of the Grasim open offer for Larsen & Toubro, the A V Birla group reiterated that it had no management control at the diversified company.

"To say that we have management control is completely unfounded," sources close to the Birlas said.

The sources cited several reasons to bolster their point. First, the group had not been informed of the Larsen & Toubro management's plan to demerge the company's cement business.

Had the group had management control, this would not have been the case.

Secondly, the Birlas had only two nominees on the 17-member board and so did not control the board.

Nor did the group have operational control. The Birlas had not directed Larsen & Toubro managing director A.M. Naik to do anything either.

The sources admitted that the situation "as of now is a mess but added: "We'll come out of it."

Newspaper reports have suggested that the Securities & Exchange Board of India could argue before Securities Appellate Tribunal that the Aditya Vikram Birla group had management control at Larsen & Toubro.

SEs pull up Grasim over L&T offer

The Bombay Stock Exchange and National Stock Exchange should have sought an explanation from Grasim Industries Ltd for the alleged delay in informing bourses about the Securities and Exchange Board of India's advice to the company to keep its open offer for Larsen & Toubro on hold pending investigations, a Sebi official has said.

"The market regulator's advice to J M Morgan Stanley, Grasim's merchant banker, to put the offer to acquire additional 20 per cent stake in L&T on hold was a price sensitive information and should have been communicated to the exchanges in time as required under provisions of listing agreement", the official said on Tuesday.

The regulator through a letter dated November 8 had communicated to Morgan Stanley not to go ahead with the offer following investigations into alleged violations in acquisition of 2.5 crore (25 million) L&T shares (10.05 per cent stake) by Grasim from Reliance.

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