• PAGE ONE
• INDEX
• HOME

LIC files for injunction against transfer of Modi Rubber shares

Our Bureau

MUMBAI, July 23

THE Life Insurance Corporation of India (LIC) today moved the Mumbai High Court for an injunction against transfer of its holding in Modi Rubber Ltd (MRL) to the promoters. The petition is likely to come up for hearing in a couple of days.

According to top LIC sources, the corporation has contended that the transfer of its 12 per cent holding in MRL happened ``inadvertently.'' They said it happened without the approval of its investment committee, whose clearance is mandatory.

The transfer documents allowing Stock Holding Corporation of India (SHCIL) to transfer the shares in the ownership of the corporation to the company was signed by two officers by mistake. Both of them were suspended last week, the sources said.

Legal opinion is in favour of LIC as the shares are not owned by an individual. ``Ours being an institution, the ownership of the shares is not with an individual. Hence the transfer of the shares without the approval of the investment committee is not v alid. The genuine owner (LIC) did not have the intention of selling the shares,'' they said.

LIC did approach HSBC Securities, the merchant banker to the open offer, to cancel the deal but the request was declined. The banker said once the shares were sold in an open offer the deal cannot be cancelled.

According to sources, the Modi group has exceeded its open offer target of 35 per cent by one per cent, including the 12.1 per cent of LIC. None of the other institutions, however, have participated in the offer. General Insurance Corporation, Unit Trust of India and IDBI account for the major part of the balance 32 per cent institutional holding.