Mumbai, April 17 (PTI): The Securities and Exchange Board of India has debarred the Lalbhai group entity, Asman Investments Ltd, from accessing the capital market or dealing in securities for two years with immediate effect for violating takeover norms.

“I also find it is an appropriate case to initiate adjudication proceedings under the Sebi act against Asman Investments (acquirers) for their failure to make a public announcement when they triggered the takeover norms on September 26, 2002, and an order for appointing adjudication officer in this regard will be issued separately,” Sebi whole time member T. M. Nagarajan said in the order.

By a management agreement (January 22, 1999), the Lalbhai group and Hitachi India Pvt Ltd agreed to come together to form a joint venture to enable the Lalbhai group and Hitachi Home & Life Solutions (India) Ltd (HHLSIL — the target company) to strengthen their relationship with the Hitachi group and to enable it to have access to latest technology in air-conditioning.

In view of the findings, in the normal course the Lalbhai group should be held liable to be directed to make an open offer as they had acquired 9.94 per cent of the equity shares from ICICI Bank in violation of the takeover regulations. It is, however, to be noted that the Lalbhai group has totally exited from ownership and control of the target company.

At present, the majority ownership, management and control of the target company is in the sole hands of the Hitachi group, Sebi said.

The market regulator said the performance of the target company, when it was under the sole control of the Lalbhai group and even under the joint control of the Lalbhai and Hitachi groups, had been far from satisfactory.

But, when the company was on the brink of sickness, the Lalbhai group acquired 9.94 per cent equity stake from ICICI Bank with a view to transferring the same along with its then existing stake to the Hitachi group at a higher than market price, without fulfilling its obligations to make public announcement to acquire shares from the public in terms of takeover regulations, the order said.

This is not only in violation of the provisions of the takeover regulations but also reflects a tendency on the part of the promoters to exit, at an opportune time, leaving the public shareholders, particularly small ones in the lurch.