Holcim (India) Pvt Ltd, the Indian arm of Swiss cement major Holcim, has moved the Securities Appellate Tribunal challenging the Rs 25 crore (Rs 250 million) fine imposed by the Securities and Exchange Board of India for alleged violation of takeover regulations.
The capital market regulator had, last month, slapped the Rs 25 crore (Rs 250 million) penalty on Holcim- the highest fine ever imposed by it on any corporate entity -for failing to make an open offer to the shareholders of Everest Industries Ltd after acquiring a controlling stake in Associated Cement Company in 2005.
ACC held 76 per cent stake in Everest Industries Ltd.
The Sebi order asked Holcim to pay the penalty within 45 days.
Sources close to the development said Holcim filed its appeal against the Sebi order last week and the court notice would be sent to the regulator in the next few days.
Holcim executives were unavailable for comments, while a Sebi official said it was yet to receive the court notice on this matter.
Sebi, in its August 25 order, had pointed out that Holcim failed to comply with its takeover regulations, which made it mandatory for companies to come
out with open offers if they gained controlling interest in a listed entity.
The case dates back to January 2005, when Holcim acquired a 67 per cent stake in Ambuja Cement India, which held shares in ACC.
Subsequently, Holcim, along with persons acting in concert, came out with 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 Ltd, it was alleged that the Holcim acquisition of ACC led to its indirect control of this company.
However, Holcim countered this allegation, saying EIL was in the unrelated business of asbestos and that it did not plan to enter this segment in India.
Besides, globally Holcim had divested from its 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 fibre in India -- although such manufacture was allowed in the country -- as part of its global strategy.
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