Mistry Group firm moves SAT against Sebi order

Laxmikant Khanvilkar & Yagnesh Kansara

Mumbai, Nov 20: In a new twist to the takeover tail of Forbes Gokak Limited (FGL), one of the group company of the Shapoorji Pallonji Mistry Group, Sterling Investment Corporation Ltd (SICL) who made the open offer to acquire FGL share holding from the public shareholders has moved the Securities and Appellate Tribunal (SAT) against the Securities and Exchange Board of India (Sebi) order clearing the counter offer made by Man Made Fibres and other group companies of Mr Pawan Kumar Sanwarmal.

SICL in its application has urged the Tribunal to set aside the impugned order passed by Sebi chairman DR Mehta and declare the counter offer of Man made Fibres null and void and of no legal effect. SICL has also urged the Tribunal to ask Man Made Fibres and other Group companies from refraining to proceed with the counter offer to acquire the shares of FGL. SICL has also sought immediate intervention from SAT in the current matter and has pleaded to issue an interim direction pending hearing and final decision of the appeal.
Following the acquisition of the Tata group stake, Shapoorji Pallonji & Co along with Sterling Investment Ltd and Cyrus Investment Ltd announced an open offer on October 13, to acquire 20 per cent additional stake in FGL. The open offer at Rs 80 per share is slated to open on November 28.

This offer follows an increase in the stake of the Pallonji Mistry group in Forbes Gokak to 14.88 per cent when the Tatas sold their 6.77 per cent stake earlier this week. The Tatas sold their 6.77 per cent stake in Forbes Gokak to Sterling Investment, a Pallonji Mistry group company, at Rs 80 per share.

The pawan Kumar Sanwarmal Group made a counter offer at Rs 88.50 after the group declared that it holds 14.08 per cent in the equity of FGL. The Man made Fibre Ltd, a Sanwarmal group company along with Mr Sanwarmal made a counter offer to the public share holders of FGL to acquire 20.88 per cent stake in FGL.

However, the original bidder SICL and Mistry group objected to the offer and alleged that the counter offerer has violated takeover code regulations by not making the counter offer during the stipulated time frame and has also not adhere to the norms on informing the regulator two working days in advance about its intention to make a counter offer.