A government missive to Petronet LNG Ltd on appointment of the company's new managing director and chief executive officer may trigger Securities and Exchange Board of India's takeover code, requiring promoters to make an open offer for acquiring 20 per cent equity shares.
Oil ministry has changed norms for Board appointment on PLL and made an officer of the Indian Administrative Service of the joint secretary rank eligible to replace the present incumbent Suresh C Mathur when he retires on March 31, 2005, industry sources said.
Petronet is a board-managed firm with one representative from public sector firms Oil and Natural Gas Corp, Indian Oil Corp, Bharat Petroleum Corp and GAIL, French consultant Gaz de France and Asian Development Bank on the Board. Petroleum secretary is the non-executive chairman while MD&CEO was a professional selected by a Board committee.
Besides Mathur, PLL also hired professionals to head company's finance and technical departments.
If a joint secretary joins the Board, the control of the company will go in hands of government and firms controlled by it. Such takeover will trigger Sebi's takeover code and public sector firms and/or government will have to make an open offer for acquiring 20 per cent stake, industry sources said.
Section 12 of Sebi's takeover code states: "Irrespective of whether or not there has been any acquisition of shares or voting rights in a company, no acquirer shall acquire control over the target company, unless such person makes a public announcement to acquire shares and acquires shares in accordance with the Regulation."
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