SAT sets aside SEBI order on Dalmias buy-back of shares in OCL

Setting aside the order passed by SEBI, the tribunal observed that as the Dalmias already had a majority holding in OCL, such acquisition of share did not attract the provisions of the Takeover code

Mumbai: The Securities Appellate Tribunal (SAT) has set aside an order of market regulator Securities and Exchange Board of India (SEBI) against the Dalmias in the case of alleged violation of the Takeover Code in a share buy-back scheme of their flagship company OCL, reports PTI.

SAT’s order came on a petition filed by the Dalmias against a SEBI order which last year had held that Dalmias had violated the Takeover code as it has not come with a public announcement.

The market regulator had also started adjudication process against Dalmias.

Setting aside the order passed by SEBI, the tribunal observed that as the Dalmias already had a majority holding in OCL, such acquisition of share did not attract the provisions of the Takeover code.

Dalmias had 62.56% share in OCL. After the buy-back of 11,83,708 shares in 2003, the shareholding went up to 75%.

SAT observed that as it was a passive acquisition, there was no change in the control of OCL, which was already with the Dalmias.

“We are in agreement with the learned senior counsel for the appellants (Dalmias) that regulation 11(1) of the Takeover Code was not attracted to the facts of the present case and that they were not required to come out with a public announcement,” SAT said.

The issue came up three years after the closure of the buy-back offer. A company called Jindal Securities had filed a petition before the Delhi High Court alleging the promoters had triggered the Takeover Code through such passive acquisition.

SEBI regulations mandated for a public announcement for acquisition of more than 15% shares as per the then existing rules.

The high court directed SEBI to look into the issue, following which the market regulator had issued notice to the Dalmias in July 2007.

The promoters had submitted before SEBI that they had not acquired any additional share or voting right in OCL and, therefore, the Takeover Code cannot be initiated.

SEBI was not convinced with it and held that Takeover Code was violated. It also noted the fact in its order stating that “the market price of the scrip of the company (OCL) was much more than the offer price, the shareholders of the company would not benefit from the public announcement”.

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IDFC to up forex share in loan book; issues Rs5,000 crore bonds

“At present, out of our total borrowing, forex loans constitute around 8% and we plan to increase it to around 12% in the future,” IDFC executive director Vikram Limaye said on the sidelines of announcing the public issue of its tax-saving long-term infrastructure bonds

Mumbai: Infrastructure Development Finance Company (IDFC) plans to increase the forex loan share in its overall borrowing, to facilitate greater participation from overseas investors, reports PTI.

“At present, out of our total borrowing, forex loans constitute around 8% and we plan to increase it to around 12% in the future,” IDFC executive director Vikram Limaye said here on the sidelines of announcing the public issue of its tax-saving long-term infrastructure bonds.

The bond issue has opened for subscription from Monday till 6th December for retail investors, the company said.

This issue is the first tranche of bonds by the infra firm which aims to raise up to Rs5,000 crore though such an issue in the current fiscal.

In 2010, the company had received the IFC or infra finance company status within the NBFC category from RBI.

The five-year issue carries a coupon of 9%.

Last fiscal, IDFC had raised Rs1,451 crore from over 7.3 lakh retail investors.

About total borrowing basket, Mr Limaye said while around 63% of the money is raised through bonds or debentures, rest is through rupee and forex loans and sub-debts among others.

“All of our foreign loan exposure is fully hedged and we don't see any stress due to current fluctuations,” he added.

Referring to the concerns on asset quality in the power sector, he said his company did not have any exposure to the state electricity boards (SEBs).

While 42%-43% of total loan of IDFC is for the power sector, around 24% is to transportation and telecom sectors each.

“Going ahead, the ratio may change if the policy bottlenecks continue in the power sector. However, we are of the opinion that things will improve in the future,” Mr Limaye said.

IDFC had posted net profit of Rs524 crore for the September quarter, 55% up over the same period last year.

Its total income rose 41% to Rs1,715 crore in the same period up from Rs1,217 crore.

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Montek hopes rupee would stabilise soon

Dealers also said the rupee was weighed down by continued dollar demand from importers, mainly oil refiners, for their month-end requirements amid expectations of further rise in dollar overseas on lingering European debt worries

New Delhi: Amid sustained fall in the rupee’s value, the Plan panel today attributed the decline to volatility in the global currency market, but expressed the hope that the Indian currency would stabilise soon, reports PTI.

“It has been a period of enormous currency volatility and you are going to look at what has happened in the Indian currency market in the light of what is happening globally. I think it will settle down,” Planning Commission deputy chairman Montek Singh Ahluwalia said in an interview to a popular business television channel.

Meanwhile, the rupee on Monday plunged by 81 paise to close at nearly 33-month low of 52.15/16 against the US dollar.

“On the matter of the currency, it would be a very good idea for nobody to speculate. Even for the Reserve Bank of India (RBI), the sensible thing to do is to make whatever calls are necessary and let the market judge.

I wouldn't want to speculate on when and how and what.

These are relevant issues but these are issues that the RBI has to decide,” Mr Ahluwalia said.

The Indian rupee is the fourth most depreciated currency in the world and the most depreciated in the Asian continent.

The RBI has attributed the movement to demand-supply factors and said it is happening globally.

A weaker rupee is a matter of concern for India as it depends on imports for over 70% of its oil and gas requirements and the depreciation of the local currency has made imports more expensive.

The depreciation of the rupee comes at a time when the headline inflation has remained above the 9% mark for 11 consecutive months.

Asked about the RBI’s policy of not intervening in the market so far, he said, “I think the RBI is the agency responsible for exchange rate management, so I don’t want to second guess what they say. There is nothing surprising in what they have said. We are not targeting any particular rate.”

He said the policy that is being followed is to ensure that the “exchange rate should be market-determined, but the RBI stands by to intervene if it finds that conditions have become too disorderly. So that’s really the RBI's call.”

Pointing to global events, he said that with multiple currencies moving up and down, it is not clear what should be a stable rate of exchange.

He added that the recent decision to enhance foreign institutional investor (FII) investment limits in the bond market is a positive one.

“For a long time, it's been felt in India that while we should limit the exposure of our corporates to foreign-denominated debt, we need not be so concerned about that exposure as long as the debt is rupee-denominated.

“So this was in fact just a move in the right direction and very much in line with what the government has been talking about earlier,” he said.

FIIs have pulled out $344.16 million in the last four sessions since 15th November.

Dealers also said the rupee was weighed down by continued dollar demand from importers, mainly oil refiners, for their month-end requirements amid expectations of further rise in dollar overseas on lingering European debt worries.

The dollar index was up by nearly 0.5% against a basket of currencies while New York crude oil was trading above $96 a barrel in European market yesterday.

“The local unit performed worst among all Asian and developing market currencies. The dollar has gained against the rupee mainly on account of its gaining strength globally with the US deficit cut accord getting a setback in the US Congress in addition to persistent weakness in the Indian rupee,” Abhishek Goenka, CEO, India Forex Advisors said.

The rupee premium for the forward dollar also slumped further on sustained receivings by exporters.

The benchmark six-month forward dollar premium payable in April dipped to 73-76 paise from 91-93 paise last weekend and far-forward contracts maturing in October also ended sharply lower at 129-132 paise from 157-159 paise previously.

The RBI fixed the reference rate for the US dollar at Rs51.7165 and for the euro at Rs69.8883.

The rupee remained weak against the pound sterling to end at Rs81.59/61 from Friday’s level of Rs81.32/34 and dropped further to Rs70.08/10 per euro from Rs69.45/47 previously.

It, too stumbled against the Japanese yen to Rs67.82/84 per 100 yen from last close of Rs66.91/93.

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COMMENTS

Rambabu Shastri

5 years ago

The highly educated Monty, along with the highly education Manu and highly educated Chiddu cannot stop the fall of the rupee, the rise of the inflation and the economic downturn of India within the next year. Let them put the whole government machinery behind it, they will not be able to stop it.This is based upon the predictions of a Chennai based astrologer who said India will see huge rise in land prices, stock prices and so on till 2012. After that, it is back to the good old days.

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