Sebi directs Birlas not to buy further shares of L&T

The Birlas suffered yet another blow to their plan to acquire Larsen and Toubro(Land T). Firing yet another salvo, the Securities and Exchange Board of India (Sebi) on Friday directed the group’s flag ship Grasim Industries not to acquire any further shares of Larsen and Toubro. In a directive to JM Morgan Stanley, the merchant banker and manager to the open offer for acquiring additional stake in Land T, Sebi said “Grasim should not acquire any more shares of Land T in the open market or through negotiations or otherwise until further advice.” A letter to this effect has been sent to the merchant banker on Friday, Grasim informed the BSE and the NSE. This communication comes in the wake of Securities Appellate Tribunal’s (SAT) rejection of Grasim’s plea for an interim relief to vacate Sebi’s stay on its open offer for additional 20% stake in the cement and engineering major. Sebi chairman G.N. Bajpai earlier told reporters that since SAT has upheld Sebi’s advice on open offer, the Aditya Birla group company cannot use the creeping acquisition route to buy additional shares. Sebi sources, however, said the regulator was examining the possibility of directing Grasim to divest its stake in excess of 15% in Land T, which were brought after announcement of the open offer. “As the Sebi had stayed only the open offer, there was hurdle for Grasim to buy Land T shares from the market so far. The regulator has now closed this door by banning open market purchases,” said an analyst. Sources clarified that the open offer has not been rejected but only the advice to stay the offer has been upheld by the tribunal. Meanwhile, Grasim Industries is likely to consider the possibility of urging the Sebi for a time-bound probe into the latter’s investigation as regards whether Grasim has acquired ‘control’ of Larsen and Toubro. Sources close to the Aditya Vikram Birla group said that the company would not hurry into a decision regarding its future course of action and was yet to decide on what course of action to chalk out following the Securities Appellate Tribunal decision on Thursday upholding the Sebi decision to put Grasim’s open offer for an additional 20% stake in Land T, on hold.