Calcutta, Sept. 18: The management of BSL Ltd today made a formal presentation before board members of the Securities and Exchange Board of India (Sebi), alleging that the Sardas’ open offer for 30 per cent of the company’s shares was legally invalid.
BSL complained to the market regulator that the Sardas did not send the draft offer document in time for the promoters to consider a counter bid. The Sardas announced the open offer on August 14 and were supposed to send a copy to the company and all the stock exchanges on which BSL was listed, within the next two weeks.
Ravi Jhunjhunwala, one of the promoter-directors of the company, said: “We had convened a meeting of the BSL board on September 3 to examine the hostile bid and decide what measures we could take to defend ourselves. But since we had not received the offer document yet, we could not finalise our strategy.”
“September 4 was the deadline for us to make a counter offer. We could not have made one even if we wanted to, because we had not received any formal intimation about the Sardas’ offer. We met high-level officials of Sebi today and explained the situation,” Jhunjhunwala added.
The BSL management is pushing for cancellation of the Sardas’ offer. “They did not even inform all the stock exchanges. We have confirmation from the Jaipur and Delhi stock exchanges that they did not receive the offer document in time.
“We are confident that Sebi will take appropriate action against the Sardas. We can always move the court if we are aggrieved by the market regulator’s decision,” Jhunjhunwala added. If the current offer is cancelled, the Sardas may not be allowed to make a fresh bid in six months.
The Sardas, however, say they had despatched the letter offer to BSL and all the stock exchanges on August 28, “exactly as required under regulation 22 of the Sebi take-over code”. “It was impossible for us to confirm delivery in time, nor are we required to do so,” a senior group official said.
SBI Capital Markets, which is managing the open offer for the Sardas, also met Sebi officials today. “Sebi has asked us for some clarifications on the offer, which we will provide. We see no reason for the offer to be cancelled. It may, at best be deferred by a few days,” the group official said.
Meanwhile, Jhunjhunwala ruled out any possibility of truce with the Calcutta-based jute baron-turned-corporate raider. He said there was no question of buying out the 12 per cent stake accumulated by the Sardas in BSL. “If they want to exit, they’ll have to find other buyers for their shares,” he said.
The Jhunjhunwalas and Churiwals have been increasing their stake through market operations, and currently hold close to 40 per cent of BSL’s shares. The Sardas must secure full subscription to their open offer to be able to topple the current management.