In the meantime, Bharti Enterprises and Bharti Global have already taken their stake in Bharti Telecom to 89 per cent, including the 9 per cent stake of Sterling for which a "sale agreement" has already been inked.

The appellate authority has, however, asked Sterling Horticulture to refrain from selling its 9 per cent stake in Bharti Telecom till the completion of its open offer at Rs 95 per share.

The two Bharti group companies had made an open offer at the same price ie, Rs 95, and have been able to mop up about 13 per cent out of the total public holding of 24 per cent. The promoters had a stake of 60 per cent in Bharti Telecom before they struck two negotiated deals, including one for 9 per cent with Sterling.

These deals tookthe holding of the promoters to 76 per cent and triggered the takeover code, forcing them to make an open offer to the public.

It subsequently made an open offer which closed on June 16. Post offer, the stake of the promoters stands at 89 per cent, including the 9 per cent stake of Sterling, which Bharti group sources say, is legally their's.

"It is a contract which has already been entered into. The transfer of shares is pending subject to the completion of the open offer. The transfer of these shares is definitely going to be held up considering first the Sebi order and now the appellate authority order, restraining Sterling from selling the shares. But we are hopeful of getting the shares transferred in our name," said a top Bharti group source.

On the other hand, the options for Sterling are limited. Either it challenges the two orders in a court of law or it makes an open offer of 20 per cent to pick up the remaining 11 per cent still in the hands of the public.

Sources said that the company isalready considering the legal option in a bid to get away from the embarrassing situation it finds itself in, of making an offer for a company which it no longer wants to acquire.

Bharti was all set to come out with its open offer when Sebi delivered its verdict asking Sterling to also come out with an open offer. Sterling had in November 1996 picked up a 9 per cent stake in Bharti Telecom and subsequently made a public offer for 20 per cent at Rs 95 per share.

However, it backed out of the open offer. Sebi, however, ruled that this was improper and that the company must make an open offer. This order was contested by Sterling at the appellate authority which directed the company back to Sebi in October, 1997. On May 18, Sebi gave another order maintaining its earlier stand that Sterling must make an open offer.