PK Ruia, who has taken over management control of two tyre companies -Dunlop India and Falcon Tyres - from the Dubai-based Jumbo group, is unlikely to make the mandatory 20 per cent open offer for the retail shareholders of these companies.
Ruia told Business Standard that the opinion he received from his own legal counsels and former Chief Justice of India PN Bhagwati suggested that his acquisition of these two tyre companies did not require to be followed by mandatory open offers, if the shareholders of the two companies cleared special resolutions to this effect.
According to him, the exemption is available under the Sebi takeover code in case of an indirect acquisition. Ruia acquired a controlling stake in Dunlop and Falcon by virtue of his acquisition of DIL Rim & Wheels, a Mauritius-based investment firm of the Jumbo group. DIL Rim & Wheels held 74 per cent and 68 per cent in Dunlop and Falcon,
Ruia added that he would seek shareholders' permission within 40 days of the acquisition through postal ballots, well before 90 days, a timeframe stipulated by Sebi.
Considering his holding in the two companies, he needs support from only 7 per cent shareholders in Falcon and 2 per cent in Dunlop.
A special resolution needs the approval of three-fourths of shareholders. He also said he had kept market regulator Sebi informed of his plan to seek shareholders' permission.