SEBI Directs Ruias to Make Open Offer

The Securities and Exchange Board of India (SEBI) has directed the Pawan Ruia group, promoters of Dunlop and Falcon Tyres, to make open offers for both the, reports Business Standard. The regulator has also directed the company to pay interest of 10 per cent to the shareholders as penalty from February 2006, over and above the offer price for violation of the takeover code by the promoters.

In the process of taking control of Dunlop India, the Ruia group acquired Dil Rim & Wheels (DRW) from the Chhabria group’s Jumbo Holdings in an overseas deal. Jumbo Holdings is incorporated in British Virgin Islands. The Ruia group used a special purpose vehicle incorporated in Singapore called Wealth Sea for the acquisition of DRW. According to the Business Standard, DRW had a 74 per cent stake in Dunlop India and close to 69 per cent in Falcon Tyres.