The company, which on Thursday announced that it was making a preferential allotment of warrants to the "existing promoter group", had claimed in its rights issue offer document of 1994 that it was a professionally managed company without a promoter group.

Hence, it had then said, the "provisions regarding lock-in period for equity shares held by promoters do not apply".

Senior ACC officials, who did not wish to be quoted, defended the cement giant, saying: "The term existing promoter group has been used as there has been a significant change in the holding pattern of the Tatas. While earlier it was fragmented and held through several investment companies, it has now been consolidated."

However, no proof of a consolidation of holdings was forthcoming from the Tatas. The Tatas have, however, increased their holdings in ACC to 13 per cent overthe last 18 months from around 11.2 per cent (as on March 31, 1997).

Analysts say Tata Chemicals and Tata Tea, along with two of their subsidiaries, continue to hold shares in ACC as they did earlier, and hence, the Tata holding continues to remain as fragmented. Tata officials declined to talk on the subject.

The head of a multinational audit and consultancy giant points out that under Section 81 of the Companies Act, a company has to identify to whom a preferential allotment is being made. He implied that the Tatas had been roped in as promoters again in order to identify the class of shareholders who would be offered the preferential allotment.

The Tatas, the "new promoters" of ACC, had earlier declined to take up their rights entitlement in a 1:10 rights issue by ACC in January 1995, when the company had raised Rs 133.34 crore.The 1995 issue, at the peak of the stockmarket boom, had carried a hefty premium of Rs 3,900 a share (face value of Rs 100).

Analysts say that the preferential allotmentbeing made now will be priced around Rs 1,200 for a Rs 100 share, as per Sebi guidelines on preferential allotments. Following the break-up in the face value, it is likely to be priced around Rs 120 a share.

The stake hike by the Tatas in ACC, say analysts, may not make a significant difference to the operational efficiencies of the company. "The operational efficiency of ACC has taken a severe beating in recent years, and except for the Jamul facility in Madhya Pradesh, the other units are doing badly," they say.

Although ACC claims to being the largest cement company with a capacity of around 11 million tonnes, its clinker production was merely 7.47 million tonnes in 1997-98, as against 7.46 million tonnes the previous year. "Hence not much should be read into their claims," they add.