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Rediff.com  » Business » UTI-I, LIC keen on Mallya's SWC offer

UTI-I, LIC keen on Mallya's SWC offer

By Udit Prasanna Mukherji & Debjoy Sengupta in Kolkata
March 14, 2005 12:13 IST
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With the pending litigation likely to be over by March 22, the specified undertakings of UTI, better known as UTI-I, and the Life Insurance Corporation are looking at UB group chairman Vijay Mallya's open offer for Shaw Wallace positively.

Their combined holding in SWC is around 12.4 per cent. Of this, UTI-I alone holds around 7.5 per cent. Top sources in both UTI-I and LIC informed that they would now go only by the commercial aspect of the offer.

UTI-I and LIC are said to have discussed the issue of the SWC open offer on Friday after receiving news regarding the settlement of the dispute.

Earlier, sources in UTI-I said that participating in the open offer during the pendency of the litigation would be sending a wrong signal to the investors at large. The open offer is set to open on April 18.

Beside LIC and UTI-I, general insurers National, New India and United India jointly hold around an eight per cent stake in SWC. It is believed that they will follow the line taken by LIC.

Commenting on the open offer, a top LIC official said the average acquisition cost of LIC for SWC shares is quite low. UTI-I sources also indicated that the offer price of Rs 250 is "fair".

Its acquisition cost is also low, with most of the shares bought under US-64 accounts. "We still have time for taking a final call. The situation will be clear this week," sources said.

Meanwhile, the Bombay Stock Exchange has asked SWC to resubmit its shareholding pattern for the quarter ended June 30, September 30 and December 31, 2004.

According to exchange officials, the reason for this is a fault in the formatting of the shareholding pattern. "This is not in line with the Sebi-specified listing agreement," said an official.

There is speculation in the market that there could be some changes in the shareholding of the company in the last six-seven months as the shareholding pattern of SWC is available in the specified format up to March 31, 2004.

The managing trustee of the National Investors Foundation and director of C D Equiresearch, C V Desai said by not submitting the shareholding pattern in the written format, SWC has violated the listing agreement.

"This is a violation. The minority shareholder has every right to know the exact pattern. The Sebi rule says that every company should comply with listing formalities for a particular quarter within 15 days of the end of a quarter," he said.

According to Calcutta Stock Exchange officials, stock exchanges generally shift the company into T or Z category in case of violation of the listing agreement.

"In most of the cases, it is shifted to the trade-to-trade category in case of violation," a CSE official said.

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Udit Prasanna Mukherji & Debjoy Sengupta in Kolkata
Source: source
 

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