SEBI blunders; Vedanta’s open offer for Cairn not yet okayed
15 Mar 2011
The Securities & Exchange Board of India said on Monday that it has not yet cleared the Vedanta Group's open offer for Cairn India, a mandatory requirement under its rules. The deal between Anil Agarwal's Vedanta and Scotland-based Cairn Energy for the $9.6-billion acquisition of Cairn's Indian assets actually seems nowhere near closure.
Earlier reports suggested that SEBI had virtually given its approval for the deal. But these reports have proved to be a not unusual case of the media leaping to conclusions – this time based on a blunder on the regulator's website.
SEBI's official website seemed to indicate on Monday that it has cleared the Vedanta group's Rs13,610 crore open offer for acquiring an extra 20 per cent stake in Cairn India. But soon after, the market regulator corrected the information, saying that the issue was ''still under process''.
A SEBI official said that it was "an error" when the website showed "final observations issued". Such final observations by SEBI usually mean a go-ahead for an open offer. But the official said that the open offer was yet to be cleared.
London-listed Vedanta had in August last year agreed to buy up to 51 per cent in Cairn India from Cairn Energy Plc. Following the acquisition, its group firm Sesa Goa was to make an open offer for buying an additional 20 per cent in Cairn, which operates India's largest on-shore oil field. But the company could not make the open offer following a petroleum ministry intervention with SEBI. The ministry said the deal was contingent upon government approval.
The Rs13,631 crore open offer was first scheduled to open on 11 October and close on 30 October, but following the oil ministry letter, SEBI refused to give approval to the issue.
