The market felt disgruntled by a SAT ruling that Swiss parent Clariant needs to pay 15% interest on delay over the open offer only to shareholders as on record date 24 February 1998.
The scrip of Colour Chem nose-dived 17.86% to Rs 198.25 by 10:25 IST on Monday as a result. Volumes of 57,006 shares were registered on BSE by then.
Reports have appeared in the media that SAT has asked Clariant International to pay 15% interest over the delay in making an open offer only to those participating in the open offer who held shares of the company as on 24 February 1998.
The order comes following an appeal filed with SAT by Clariant International and EBITO Chemiebeteiligungen AG against a Securities Exchange and Board of India directive to Clariant to pay investors an interest of 15% per annum for delay in making the offer.
In October 2002, Sebi had directed the Swiss company International to make an open offer to shareholders of Colour Chem for 20% additional stake. Sebi had then also asked the company to treat 21 November 1997 as the reference date for setting a price for the open offer.
Sebi has ordered the acquirer to pay an interest of 15% per annum to shareholders of Colour Chem for the delay in making the open offer. Interest would have to be paid for the period from 22 March 1998. The order was issued on 16 October 2002 and the open offer was urged to be made within 45 days of the date of the order.
Sebi said that the acquirer had violated regulations 10,12 and 14 of the Takeover Code as it acquired 50.1% shares/voting rights and control in the target company, without making a public announcement to acquire shares/voting rights or control of Colour Chem in accordance with the Regulation 13.
Colour Chem was incorporated in 1956 in technical and financial collaboration with Hoechst and Bayer AG and three Indian business groups - the Ruias, the Khataus and the Ghias.
In 1990, Bayer AG disinvested and Hoechst AG progressively increased its equity stake to 50.1% to make Colour Chem its subsidiary representing its specialty chemicals division in India. Subsequent to the merger of the speciality chemicals division of Hoechst AG with Clariant AG in 1997, Colour Chem became a part of the global Clariant group. Colour Chem has a subsidiary, Vanavil Dyes & Chemicals in Cuddalore, Tamil Nadu.
Colour Chem is a manufacturer and merchant exporter of pigments, fine chemicals and leather chemicals and currently enjoys Trading House status. In order to align the group more closely to the industries that it serves, Clariant Group has changed the nomenclature of some of its divisions. In line with this practice, the company also changed the names of the concerned local divisions from April 2000. The business structure of the company now comprises the following divisions: life science and electronic chemicals, pigments and additives, textile, leather and paper chemicals, cellulose ethers and polymerisates and functional chemicals.
For the third quarter ended 31 December 2002, the company registered a massive rise in net profit to Rs 2.90 crore on a 19.2% growth in net sales to Rs 81.46 crore.
As on 31 December 2002, promoters held 50.10% stake in the company, while the public and domestic institutions held 19.56% and 22.46%, respectively.
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