Bhanot Construction matter: Sebi directs promoters, others to make open offer

In a more than a decade-old case, Sebi has directed promoters and several other entities related to Bhanot Construction and Housing to make an open offer to the company's public shareholders.

According to a Sebi order dated August 2, Bhanot Construction's 17 promoters, two of whom are now no more, collectively held 25.08 per cent of the paid up equity share capital of the firm as on March 31, 2005.

Between April 1, 2005 and March 31, 2006, five of the promoters acquired 8.85 per cent additional stake in the firm. Consequently, the collective shareholding of the promoters had increased to 33.93 per cent of the paid up equity share capital of the company.

The acquisition had triggered the obligation of promoters to make a public announcement of an open offer for acquiring shares in terms of SAST (Substantial Acquisition of Shares and Takeovers) Regulation.

In its order, the regulator noted that the promoters "failed to make any public announcement".

It also directed the remaining promoters and the legal representatives of the two deceased promoters to make a public announcement to acquire shares of Bhanot Construction within a period of 45 days from the date of the order.

The entities also have to pay the consideration amount along with an interest at an annual rate of 10 per cent to the shareholders who were holding shares in the firm.