The Telegraph
Since 1st March, 1999
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Sebi vetting Grasim plea on L&T

Mumbai, Dec. 21 (PTI): The Securities and Exchange Board of India (Sebi) is examining a plea by Grasim Industries to ask Larsen & Toubro (L&T) to “put on hold” its plans to demerge the cement division as the Birla group company's open offer for additional stake in L&T is “alive”.

Grasim argues that just as its open offer was stayed by the market regulator pending investigation, it would be unfair to allow the target company (L&T) to restructure its business as the offer still exists, Sebi sources said here today.

The L&T board will meet on December 28 to consider the proposal to demerge the cement division and discuss the issue of roping in UK-based CDC as investor into a new company as the December 7 meeting remained inconclusive.

Grasim Industries holds just over 15 per cent stake in L&T. And, if the demerger proposal with provisions to give 25 per cent stake to L&T shareholders in the new entity is allowed, the Birlas may end up with just about 3.8 per cent stake in the proposed company.

Meanwhile, the Investors’ Grievances Forum has demanded a valuation of CDC’s proposal to acquire stake in the proposed company.

The L&T management should disclose all facts about the proposal as “it is investor unfriendly”. Financial institutions should use care to protect their interest as well as that of small investors, IGF said.

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