GESCO joint managing director Pranay D Vakil said,"The Dalmias have violated various formalities of the Takeover Code. For example, Continued on Page 11GESCO alleges breach of takeover code

when the company revised its offer price, GESCO was not informed about it on time and the share acquistions were made when prices were depressed. But we are yet to get a feedback from Sebi."

In a letter to the market regulator, GESCO has stated that it had received a letter from the acquirers on October 18, even though they had breached the five per cent threshold limit as early as August 29.

According to the Sebi takeover code, an acquirer who acquires control of over five per cent or more of the voting rights in a listed company is required to disclose the aggregate of such control in the company.

GESCO further pointed out that Renaissance Estates and the person acting in concert had delayed in informing the company about the breach and that this was aimed at ensuring that the acquisition of shares was made at depressed prices substantially lower than what the market price would have been, had the price-sensitive and material information been disclosed within the statutorily-mandated deadline.

This material suppression in order to keep the market price depressed and thereby to effect a low-cost acquisition of substantial stake in GESCO was to the detriment of the small stake-holders who did not have access to this information, which was a clear violation of Sebi (Insider Trading) Regulations, 1992.

Reacting to the allegations, Mr Abhishek Dalmia of Renaissance Estates said it would now be up to the regulator to decide on it, and that the Dalmias had played by the rules. "We have all the proofs", he told The Financial Express.

Sebi senior executive director OP Gahrotra said the regulator would look into the allegations and ask for the views of the other party (the Dalmias). After that, Sebi would take the next course of action if the situation so warrants. "There is a clear audit trail of things. We will, as usual, look into the complaint and call for a reply from the other party. Then we will decide what to do," he said.

GESCO has alleged that Samir Koticha of ASK Raymond James Associates, the manager to the proposed open offer by the Dalmia Group, himself purchased 8,400 shares in the company and has "appeared" to have sold the same to the acquirer on or about October 6, 2000.

It has asked the Sebi to conduct a detailed scrutiny of the orchestrated action of the various persons who have acted in concert and have systematically disregarded the Takeover Code. GESCO has also called upon the capital market regulator to scrutinise the role of the merchant banker.

It may be recalled that a public announcement was made by ASK Raymond on October 21 on behalf of Rennaisance Estates Ltd and Sanjay Bakshi (a person acting in concert), who together control 10.4 per cent of GESCO's equity capital, for acquiring via an open offer additional 45 per cent stake in the target company at a price of Rs. 27 per share payable in cash.