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Ranbaxy firm sold 4.7% GTB stake to Nirma

BS Bureaux in New Delhi/Hyderabad/Bombay

Nirma Chemicals had bought 5.8 million shares of Global Trust Bank from Vidyut Investments, a fully-owned subsidiary of Ranbaxy Laboratories, between December 2000 and January 2001- the period during which stock broker Ketan Parekh is alleged to have ramped up the GTB share price prior to the announcement of its merger with UTI Bank. The 5.8 million GTB shares work out to a 4.7 per cent stake in the company.

The Securities & Exchange Board of India is investigating whether the three Nirma subsidiaries- Niya Investments Pvt Ltd, Niyogi Investments Pvt Ltd and Nerutya Investments Pvt Ltd- that bought the shares from Vidyut Investments were used by Ketan Parekh to park the GTB shares.

Nirma, however, has denied to Sebi any connection with Parekh. Sebi sources told Business Standard that the regulator was still gathering data and it was premature to comment on the issue. So far, Sebi has not found involvement of any corporate in the GTB price rigging case.

Senior Ranbaxy officials refused to comment on the matter. GTB executive director Sridhar Subasri said that as long as purchases were below the five per cent mark, it wouldn't come to the notice of the company.

The share transfers would automatically take place since it is under demat category.

Apart from other things, Sebi is investigating whether the shareholding of Parekh and others acting in concert in GTB breached the 15 per cent limit- when the Takeover Code gets triggered and the acquirers are required to make an open offer for another 20 per cent shares of the company.

Vidyut Investments has a net worth of Rs 272.1 million as on December 31, 1999, according to the last Ranbaxy annual report. While it reported an income of Rs 1.308 billion for 1999, its profit after tax was Rs 1.858 million. Its other income of Rs 150.2 million included dividend from long-term investments, profit on sale of long-term investments, brokerage and commission, vyaj badla and arbitrage. In 1999, Vidyut Investments had bought 1 million shares of Vidyut Travel Services Ltd which then became a fully-owned subsidiary. The main business of Vidyut Travel is to operate the six-seater aircraft of the company on a chartered basis as a non-scheduled air taxi operator.

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