Lever To Appeal To Finance Ministry

Hindustan Lever yesterday denied any violation of insider trading rules and said it would appeal to the finance ministry against the Sebi order. In a two-page statement, the company asserted that its purchase of eight lakh shares of group company Brooke Bond Lipton India Ltd in March 1996, just before the company was merged into HLL, was valid and legal.

The company also said it would contest any prosecution launched against its present directors, or former chairman S M Datta. Lever has roped in legal opinion to support its claims of innocence. The company is confident that its stand, corroborated by eminent jurists and lawyers like former Chief Justice P N Bhagwati, Arun Jaitley and K S Cooper will be vindicated by the appellate authority, it said.

Lever has argued that it purchased the shares from UTI in a transparent manner. The deal was struck after the company results were announced and it paid a higher price of Rs 350.35 while the ruling market price was Rs 318. The company did not buy shares from the UTI on the basis of the knowledge of possibility of the impending merger. If that were so, Lever could well have purchased the shares earlier at Rs 240 which was the price in February 1996.

Lever reiterated that it had no knowledge of the swap ratio and nor did it gain financially from the transaction. The shares were bought with the very purpose of having the group holding at 51 per cent. No gain has accrued to Unilever and its shareholders, it stated.