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Ambuja-ACC deal in new glare
- New Sebi sleuth to call for documents not turned over so far

Mumbai, Nov. 13: The Securities and Exchange Board of India (Sebi) will launch a deeper probe to determine if Gujarat Ambuja Cement’s acquisition of 14.5 per cent in Associated Cement Companies (ACC) led to a change of management control.

An investigating officer, this time with new powers bestowed by the Sebi Ordinance, will call for documents and inspecting records, rather than rely on material and facts offered by companies of their own volition.

Coming up for scrutiny are minutes of board meetings to establish whether Gujarat Ambuja wielded control over ACC’s affairs. The earlier probe was based on facts provided by those involved in the transaction.

The trail could prompt the regulator to invoke, for the first time, its new powers under the Sebi Act, allowing it to search and scrutinise papers not scanned so far. More documents are likely to be summoned from Bombay House (the Tatas), Cement House (the headquarters of ACC) and from the Gujarat Ambuja management.

The reopening of the case comes after the Securities and Appellate Tribunal (SAT) asked Sebi to examine whether Gujarat Ambuja Cements gained control of ACC’s management following its acquisition of 14.45 per cent stake from the Tatas. “We have received the order and will start proceedings soon,” the source said. The regulator will either launch the probe by the weekend, or by early next week.

“Sebi is directed to properly investigate the question as to whether the Ambujas acquired control of ACC as a result of shares sold to it by the Tata group,” the order of the one-man tribunal under C. Achuthan states.

Sebi, it says, is free to decide the future course of action after completing the probe. Its earlier investigation, based on submissions made by Ambujas, ACC and Tata group companies, had led to the conclusion that control has not changed after the deal.

Earlier, the market regulator had not tried to find out whether Gujarat Ambuja is in a position to effectively control ACC. SAT opined in its order that this investigation had its limitations and a lot of evidence was unexamined. “It is futile to expect the Ambujas, the Tatas group or ACC to voluntarily furnish any material which would not support their contention.”

Gujarat Ambuja and Ambuja Cements had acquired 14.5 per cent of ACC from the Tatas in three tranches in 1999-00, at Rs 370 per share. Since its stake was below 15 per cent, Regulation 12 of the takeover code, which would have required an open offer, was not triggered.

The new probe will seek to find whether Gujarat Ambuja influenced the ACC board or exercised control in any manner by virtue of its holding in the cement company.

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