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SEBI asks Mallya, Chhabria to offload stake in Herbertsons

Securities and Exchange Board of India has asked UB Group chairman Vijay Mallya and associates, Kishore Chabbria and M D Chabbria to divest their holdings in Herbertsons Ltd, which was acquired in violation of listing agreement and regulations in 1994.

Mallya and people acting in concert should divest five to six per cent of their holding in Herbertsons acquired in violation of SEBI's listing agreement norms and bring down the stake to 21.38 per cent, the market regulator said in its order.

In case of K Chabbria, M D Chabbria and associates, SEBI said they should scale down their holding to 10 per cent, the threshold limit of takeover code, and divest 37-38 per cent equity bought in violation of the norms.

These shares should be sold to the public through an open offer, SEBI said in its order on Tuesday.

The offer price for the sale shall be at the face value of the shares on the date of the order or lowest price at which they were acquired, whichever is lower, it said.

The offer document for such sale should be filed with SEBI within a period of three months from the order date, it added.

Mallya and associates had in December 31, 1994 increased their shareholding from 21.38 to 25.66 per cent.

In addition to this, Mallya, through a scheme of merger and acquisition of six companies with United Breweries, acquired about 2.5 per cent of Herbertson during December 1994 and September 1995, SEBI said.

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