The Hindu Business Line : SAT appoints Deloitte to ‘re-value’ Dunlop

Super valuer
SAT appoints for the first time a firm to value an open offer that has already been valued by a SEBI-appointed firm
This move will be welcomed by all those firms whose open offer price has run into difficulties with SEBI

Ravi Ranjan Prasad

Mumbai, July 20 The Securities Appellate Tribunal has for the first time appointed an independent firm to evaluate the price of an open offer that has already been valued by a SEBI-appointed firm.

On an appeal by Wealth Sea Pvt Ltd, the acquirer of Dunlop India Ltd (DIL), the Tribunal has appointed Deloitte Touche Tohmatsu India Pvt Ltd to evaluate Dunlop and submit its report within a month from the date of its order.

The appellate body had to intervene in the pricing of the open offer as the valuation report given by Bansi S. Mehta & Co. (the SEBI-appointed independent valuer) was found to have infirmities, contradictions and deficiencies, according to the SAT order of July 13.

Wealth Sea had approached SAT as it was unhappy with the open offer price (Rs 43.73) set by Bansi S. Mehta & Co and also due to SEBI’s refusal of its request for appointment of another independent accounting firm for a revaluation of Dunlop.

SEBI had appointed Bansi S. Mehta & Co, not satisfied with Wealth Sea’s revised open offer price (Rs 17.50 per share) set by the acquirer’s merchant banker.

On November 28, 2005, Wealth Sea Pvt. Ltd indirectly acquired 74.5 per cent of the shares and voting rights in Dunlop India Ltd (then a sick company) through acquisition of ‘DIL RIM & Wheel Corporation’, a subsidiary of Jumbo World Holdings Ltd, triggering the open offer.

SAT’s intervention will be welcomed by all those acquirers whose open offer price has run into difficulties with SEBI, said an expert familiar with the matter.