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The Securities and Exchange Board of India (Sebi), has begun the process of vetting the complex Holcim-Ambuja-ACC restructuring deal.
Sources say Sebi is likely to question the companies involved on the valuation rationale, minority shareholders’ interests and independent directors’ opinion.
This is after recent changes in the rules directing listed companies to seek Sebi's approval for all merger, amalgamations or restructuring deals.
“The recent circular gives Sebi powers to vet such transactions. The objective behind it is to see whether the structure is not anti-minority shareholders, valuations are not convoluted and whether the independent directors have acted in the right capacity,” said a person with knowledge of the development.
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“Sebi is likely to ask question Holcim as to how it arrived at a Rs 11,500 crore valuation for 50 per cent stake in ACC when the market value was much higher. And, about the Rs 3,500-crore of cash moving out from Ambuja's balance sheet,” said a source.
The Holcim restructuring, which involves a merger and stake transfer, is the first major deal after the merge and acquisition rules were amended by Sebi earlier this year. Previously, companies were able to execute such transactions by obtaining a no-objection certificate (NOC) from stock exchanges and approval of a high court.
Besides its clearance, Sebi has made it mandatory for companies to obtain a valuation report from an independent scrutiniser. Also, the transaction has to be put to a vote, where the resolution should receive more votes in favour of it than against it from public shareholders.
The rules were tightened in February after some companies were found pushing ahead with deals which were not always in the interest of the public shareholders. Legal experts said with the new rules mandating multi-level clearances it isn't easy for companies to pass off anything.
After Sebi’s vetting, the deal will have to obtain an NOC from the stock exchanges. Later, the deal will have to be passed by public shareholders, by postal ballot or e-voting. After that, the company has to obtain a nod from the relevant high court, which will check if all approvals are in place.
