The judgement relates to the acquisition of the Associated Cement Companies (ACC) by Holcim in January of 2005. Pursuant to the change in control Holcim was required to make an open offer to shareholders of ACC and to shareholders of any listed subsidiary companies of ACC who were affected by the change in control, albeit indirectly. Thus, Holcim was obligated to make an open offer to shareholders of ACCÆs listed subsidiary, Everest Industries.
Holcim sought an exemption from making an open offer to shareholders of Everest Industries citing the precedent of an earlier case. Holcim also submitted that its global policy did not allow it to engage in non-core activities. Specifically, Holcim said that it had no plans to be engaged in the manufacture of products using asbestos fibre in India, the business of Everest Industries.
SEBI ruled on August 25 that the precedent cited by Holcim ôemphatically demonstrated that even in an indirect acquisition as a result of global arrangement, irrespective of intention, irrespective of size, the acquirer is required to make an open offer to the shareholder of the Indian subsidiary, from the date of change in controlö. The wording of the SEBI order was quite critical, stating ôthe conduct of Holcim has been in complete defiance of the provisionsö and further used words like shocking and mischievious to describe the lapse by Holcim.