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May 11, 2001
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Money > Business Headlines > Report May 11, 2001 |
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Sebi plans probe into Raymond buy-back timingJanaki Krishnan & Reeba Zachariah Sebi is planning to launch a probe into Raymond's buy-back programme, which was completed in March this year. The probe will centre around the reason for the buy-back which was done when prices in the open market were actually rising. The buy-back commenced in February 1 this year and was completed by mid-March. In early January, when the buy-back was announced, the share price of the scrip was around Rs 125, touching a high of Rs 140 on February 20. Towards the end of March, the price had dipped to around Rs 120, while at present, it is trading in the range of Rs 108-112 per share. According to Sebi officials: "It would make sense for the company to make a buy-back when the share prices are sufficiently low. Further, what was the hurry in completing the buy-back in such a short time when it had time until February next year (2002) in which to do it," said a Sebi source, adding that investigations would look into whether prices were propped up to accommodate any associates of the company's promoters. Technically, a buy-back transfers resources from the company's reserves to shareholders. As regards timing of the buy-back, Raymond president (finance) Pradeep Bhandari, said: "We felt it was the appropriate time to go in for a buy-back. It has nothing to do with share price movements as prices always fluctuate in the market." He added that the average buy-back price was at Rs 135. "The one-year time is an enabling resolution which has been passed (by the shareholders) and it provides flexibility to the company. When we got the required amount of equity back, we closed the offer," Bhandari said. The board proposed the offer in January 2001, and the offer was closed by mid-March, 2001. With respect to Sebi planning to investigate the buy-back scheme, Bhandari said, "We are not aware of it but if it does, it can do so, as we have done the transaction through open market and records are available for checking." The total outlay of the buy-back programme was Rs 1.87 billion while the company had said that the buy-back price would not exceed Rs 160 per share. Powered by YOU MAY ALSO WANT TO READ:
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