This was the biggest monetary penalty imposed by Sebi on any corporate entity.
In its August 2006 order, Sebi had said that Holcim had violated takeover guidelines as it failed to come out with an open offer for Everest Industries, in which ACC held a 76 per cent stake.
Holcim had directly bought a 13.82 per cent stake in ACC from Ambuja Cement India, and subsequently scaled up its stake to 34.72 per cent through an open offer. This triggered the takeover code in Everest Industries, a listed entity, but the Swiss cement-maker did not comply with this rule, said Sebi. The Sebi order had asked Holcim to pay the penalty within 45 days. However, the company filed appeal before SAT against the Sebi order.
The matter dates back to January 2005 when the Swiss MNC acquired a 67 per cent stake in Ambuja Cement India, which held stake in ACC. Subsequently, Holcim, along with persons acting in concert (PAC), made an open offer to raise its combined holding in ACC to 52 per cent.
Since ACC held a 76 per cent stake in Everest Industries, it was alleged that the Holcim's acquisition of ACC led to its indirect control of Everest.
However, Holcim countered the allegation by saying Everest was in an unrelated business of asbestos and the MNC did not plan to enter this segment in India.
Holcim had globally divested non-core assets worth $1.25 billion in four years beginning 2002. In its submissions before Sebi, Holcim said it did not want to manufacture products using asbestos in India as part of its global strategy.
