Major industrial houses in Andhra Pradesh are up in arms against India Cements Ltd for its bid to take over Hyderabad-based Raasi Cements Ltd.
They want the state government to immediately intervene and stop the hostile takeover bid like the way the Tamil Nadu government intervened to prevent Essars bid to take over Tamilnadu Mercantile Bank.
They warned the government that its passive role in the matter could generate resentment among the entrepreneurs as well as the shareholders who number almost five million in Andhra Pradesh.
A dozen industrialists met Chief Minister N Chandrababu Naidu yesterday to impress on him the need for immediate intervention for stalling India Cements takeover bid.
Describing the India Cements move as nothing but a hostile takeover bid, the industrialists, led by K Anji Reddy, chairman of Dr Reddys Lab, warned of industrial unrest triggering off all over the country if the financial institutions (FIs) failed to see reason in Raasi objections vis-a-vis the the India Cements overtures.
At a hurridly convened news conference here this afternoon, Reddy along with Satyam Computers chairman Ramalinga Raju and DCL Chairman M V Raju said the industrialists of Andhra Pradesh would extend to the Raasi promotors our full moral, ethical and financial support in this hour of crisis.
Pennar group chairman Nrupender Rao, Nagarjuna group director Rahul Raju Gati chairman M K Agarwal were among the others present.
The industrialists were rather harsh on India Cements, charging that its contribution to the cement industry was not even one-hundredth of Raasi chairman B V Rajus contribution.
Anji Reddy charged India Cements of first splitting the Raasi family and then raiding the company. This is against our culture, he explained.
Anji Reddy was also angry with the Andhra Pradesh Industrial Development Corporation (APIDC) for selling its holding to India Cements in total haste.
Anji Reddy said that the FIs Unit Trust of India and Life Insurance Corporation which together hold 12.97 per cent of the Raasi shares should sell their holdings only to Raasi promotors and not to the raiders.
He explained that Raasi promotors already hold 43 per cent while another 3 per cent is held by close associates.
If the 12.97 per cent of shares with the financial institutions are also transferred Raasi promotors will be comfortable, he added.
A three-page statement handed over at the media conference after the meeting with the Chief Minister admitted that the APIDC had offered on February 21 to sell their holdings of Raasi shares.
Raasi managing director Vishnu Raju agreed in principle to buy the shares and a meeting was fixed between Raasi chairman B V Raju and APIDC for February 23. Raju could not attend the meeting due to ill health and by the time he could meet the APIDC chairman and managing director, it was quite late,the note said.
