India Inc Startled

Mumbai, November 28: | Updated: Nov 29 2002, 05:30am hrs
Corporate India was largely startled by the Securities Appellate Tribunal(SAT) order on Thursday, which will delay the open offer of Grasim Industries for acquiring an additional 20 per cent in Larsen & Toubro (L&T).

All India Association of Industries (AIAI) president Vijay Kalantri said, When we are headed for economic reforms, overregulation can only hamper those reforms. Yes, there might have been flaws in the dealmaybe some law was overlookedbut if someone has paid and bought shares, you cannot declare the entire deal null and void. There must be a penalty for any oversight not a decision to completely squash the deal. The Birlas are a big group, known for the business ethics and norms they follow. If any economic loss has occurred due to a deal, there should be an economic penalty, not a decision such as this.

A director of a leading multinational FMCG said, It is first of all, the prerogative of the person making the public offer to decide upon the amount. Thereafter, it is upto the shareholders to decide whether that offer is to be accepted or not. Open offers are like a VRS program completely voluntary and not mandatory at all.

If people want Rs 390 for the shares, then they have wait. It is up to the person making the offer to decide if he wants to offer Rs 190 or Rs 390. I dont understand why Sebi has got involved in the first place. According to Videocon International chairman and managing director Venugopal Dhoot, SAT is the judicial authority and India being a democratic country judiciary is the supreme authority. Therefore everyone has to abide by the judgement. However, in this case Birlas will have to make an appeal to the higher Court.