The Telegraph
Since 1st March, 1999
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Sebi vows to finish L&T probe soon

Mumbai, Oct. 25: The Securities and Exchange Board of India (Sebi) today said it will speed up the probe into alleged insider trading in Larsen & Toubro (L&T) shares.

At the centre of the investigation is the deal under which Reliance sold its 10 per cent stake in L&T to Grasim Industries at Rs 306 each in November last year.

“We are expediting the investigations into alleged insider trading in L&T. It should be completed before the open offer announced by the Birlas kicks off on December 9. We will ensure that parties concerned adhere to legal requirements,” Sebi chief G. N. Bajpai said.

The Investors Grievance Forum (IGF) claimed on Thursday it sent a legal notice to the market regulator on the L&T controversy, asking for a stay on the Birlas’ offer. Bajpai said he was considering that request.

The remarks came even as the Birlas confessed to having made purchases of L&T shares from the market after they announced the offer about two weeks back. At the same time, they shrugged off calls for a better deal to retail investors, saying the price of Rs 190 was fine.

Speaking to reporters later, Grasim executive vice-president D.D. Rathi said his company now holds 15.35 per cent in L&T, up from 14.5 per cent on the day its offer was made public. He asserted that Sebi regulations do not hold back companies from making open market purchases once they declare an open offer. He said Sebi has not talked to his firm about IGF’s grouse.

Rathi defended the offer price in the context of L&T’s share price in recent months. He skirted questions on the possibility of a hike in the offer price. The group was not obliged to inform the L&T management while making the offer. The Birlas, he said, are exploring synergies with L&T’s cement division.

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