Mumbai, Jan 31: The Securities and Exchange Board of India (Sebi) has asked Mahindra British Telecom (MBT) to appoint a lead manager other than Kotak Mahindra Capital Company for its proposed initial public offer (IPO) to conduct due diligence. The regulator's decision is based on the suspicion that there was "associate relationship" between Kotak Mahindra Capital Company which is the lead manage to the issue and issuer MBT, Sebi senior executive director OP Gahrotra said.Though KMCC has claimed that there was no associate relationship between the companies by citing that Anand Mahindra was only holding a small shareholding of about 7 per cent in the company, having a common director in both the companies leads investors to the suspicion that the sister company was managing the issue.
"To remove this suspicion we have asked KMCC to get the due diligence conducted by another lead manager," Mr Gahrotra added.Rule 5.4.1 of the Sebi (Disclosure and Investor Protection) Guidelines for Captial Issues 2000 stipulates that a "merechant banker who is associated with the issuer company as a promoter or a director shall not to lead manage the issue of the company. The report of the Sebi studying the issue of "associate relationship" between KMCC and MBT was first reported by The Financial Express on January 9 last. Sebi was of the view that there was no clear bar on a group company marketing an initial public offer.
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
