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June 23, 2001
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Money > Business Headlines > Report June 23, 2001 |
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Sebi asks Modis to explainBS Corporate & Markets Bureaux The Securities and Exchange Board of India has asked the Modis to explain reasons for the delay in beginning the open offer for Modi Rubber. The market regulator has given the promoters time till July 4 to reply. The market watchdog wants to know whether the prevailing open offer is void and null as alleged by the financial institutions in their letter to Sebi, dated June 20. "We have officially communicated this to Modis on June 21 and are expecting an explanation from the promoters before taking a formal decision on this," a top Sebi official told Business Standard. However, Sebi will not ask the promoters to postpone the offer due to these allegations. "This is not a serious issue. The delay by the promoters in announcing the offer can not be taken as a misuse of the policy on open offers. As we have not yet taken any decision on this, the offer will close on July 3 as expected earlier," the official added. However, Sebi is not holding the Modis responsible for the delay in making their open offer as the delay was caused by the clarifications sought by the markets regulator itself. "There was a lot of back and forth correspondence between us and the merchant bankers," Sebi sources said, adding, "so the original schedule could not be adhered to." Sebi officials agreed that the original schedule was overshot. While Sebi is expected to give a formal reply to the institutions' (FIs) allegations next week, sources said Sebi had allowed the Modis to go ahead with the offer. "If it had been null and void we would not have allowed them to proceed with the offer," said Sebi sources. The offer was to have opened on May 16 but due to the delay, it opened only on June 4. Meanwhile, Sebi, prima facie, feels that there was no violation of the takeover code by Purnendu Chatterjee of the George Soros group in acquiring around 14 per cent stake in Modi Rubber since the Soros group is not registered in India. If registered elsewhere as a sub-account then it must have a entity broking for it in the country. Or else it could have taken the participatory note route in which case Sebi is helpless as it has no jurisdiction over foreign entities who are not directly connected in any way to India. PNs are issued by FIIs operating in India to overseas clients. They buy Indian paper on their behalf and issue PNs to them. Powered by YOU MAY ALSO WANT TO READ:
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