The Securities and Exchange Board of India (Sebi) has asked the merchant bankers of Sterlite Industries' share buyback scheme to put the programme on hold till further notice.
The market regulator is exploring whether its recent order, debarring the company from accessing the capital markets following allegations of price rigging in 1998, stands in the way of the buyback.
Meanwhile, the Bombay Stock Exchange (BSE) said on its website: "Sterlite Industries shall temporarily not acquire any securities under buyback programme pending certain clarifications sought by Sebi. The buyback will commence only after such issues are resolved."
While the earlier order was being interpreted as one that only debarrs Sterlite from raising funds from the market, it now appears that Sebi is even looking at whether Sterlite should be banned from the capital markets altogether. Company officials declined to comment.
The scrip fell 5.1 per cent to Rs 107.45 on BSE today. The merchant bankers appointed for the buyback are SSKI and Credit Lyonnaise. The buyback was to be made at a price not exceeding Rs 200 a share, far higher than the current market price.
Sterlite, after obtaining all statutory approvals, announced the buyback of up to a maximum of 1.398 crore equity shares of Rs 5 each through open market operations.
The offer opened on Monday (August 13) and was to close on November 30, or when the firm completes the buyback to the extent of 25 per cent of the issued equity shares under the offer, whichever was earlier.
