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SEBI may call for more details on ACC deal

Our Bureau

MUMBAI, Nov. 8

THE Securities and Exchange Board of India may make use of some of its new powers while probing, as directed by the Securities Appellate Tribunal, whether there was any "change of control'' in the Gujarat Ambuja-ACC deal.

According to a SEBI source, the regulator can now use its right to call for information even in respect of old cases. If the party fails to comply with the regulator's request, it will become a new offence, and SEBI can impose penalties, he said.

The Government recently issued an Ordinance granting more powers to the capital market regulator.

It is not clear whether the power of search and seizure can be made applicable to old cases. But in calling for information, SEBI can exercise its new powers, said the source.

According to the source, the regulator is unlikely to appeal against the SAT order in the High Court, even though it has the option to do so. Instead, it will have a re-look at the deal.

It appeared that SEBI had `merely' taken a decision on the matter at that time on the basis of legal provisions and without doing a `proper' investigation, the source said.

The SAT has now asked the regulator to re-examine whether Gujarat Ambuja had gained control over ACC by acquiring the Tatas' stake in the cement company. With new powers, SEBI would be able to go deep into all aspects of the case, the source said.

The case related to Gujarat Ambuja acquiring 14.5 per cent stake in Associated Cement Company from the Tatas in 1998. SEBI had ruled that Gujarat Ambuja need not make an open offer as its holding is below the trigger limit of 15 per cent under the take over regulations. SAT, following representations from investors and shareholders, had asked SEBI to reinvestigate the case.

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