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SEBI exempts Tata Ind from making open offer

Our Bureau

Mumbai , Dec. 23

SEBI has exempted Tata Industries Ltd from making a public open offer in its "indirect" acquisition of India Emerging Companies Investment Ltd, by buying the 50 per cent stake of Niskalp Invesment & Trading Company Ltd.

Niskalp holds 70.50 per cent shares in India Emerging Companies Investment Ltd, which is listed on Delhi, Pune and Ahmedabad stock exchanges.

Tata Industries Ltd proposed to acquire 50 per cent stake of Niskalp held by Tata Finance Ltd, before it was merged with Tata Motors Ltd, early this year for a nominal consideration of Re 1 for entire equity shares.

Granting the exemption, SEBI order by Mr Madhukar, Whole-Time Director, said "this exemption is granted without prejudice to the rights of SEBI to take any action for violation, if any, of the Takeover Regulations, by the acquirer."

The order noted that the current shareholding pattern of the target company, along with the shareholding, would not change subsequent to the proposed acquisition. "Further, the acquirer (Tata Industries Ltd) neither holds any shares in the target company nor does it propose to purchase any shares in the target company," the SEBI order dated December 22, 2005, said.

In its submission, Tata Industries Ltd, pointed out that "the Tata Group had taken various steps to recover the losses/amounts pertaining to the financial irregularities/fraud committed by the former Managing Director and some senior executives of the erstwhile transferor (Tata Finance Ltd) including initiating civil and criminal actions against the concerned senior executives, co-operating with various authorities in various investigations, prosecutions etc."

The Tata Group infused Rs 300 crore into Tata Finance to ensure that the public, including fixed deposit holders do not suffer losses. Tata Industries Ltd also assured that the proposed transfer of shares of Niskalp, "would not impact in any manner, the steps being taken in pursuing the legal cases instituted and co-operation would be extended to the authorities, as and when required and that there is no change contemplated in the control of target company (India Emerging Companies Investment), including the composition of the board of directors... "

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