Suspecting violation of norms to check fraudulent and unfair trades, Sebi today ordered close monitoring of a proposed delisting of Indian unit of global pharma giant AstraZeneca.
The capital markets regulator also said there appeared to have been a coordinated and concerted attempt by the Swedish promoters of AstraZeneca Pharma India and a Hong Kong-based fund house Elliott Group during a previous Offer for Sale of the company's shares.
This is the second case within a month where a Hong Kong based fund has come under scanner for suspected foul play in an Offer For Sale (OFS) through use of participatory notes (P-Notes) and sub-accounts.
While Sebi is still continuing its probe into the matter, the regulator passed a seven-page late night order asking BSE and NSE to "closely monitor the entire delisting process of AstraZeneca Pharma India Ltd and allow the final delisting of its shares only after satisfying themselves that the process has been fair and transparent".
Last week, the company had informed that shareholders through postal ballot have given their go-ahead to a delisting proposal.
The two stock exchanges have also been asked to promptly report any aberrations noticed in the delisting process, while the promoters of the company would be able to finally purchase the shares from public shareholders only after seeking approval from the BSE and the NSE.
The Sebi order has come into effective effect.
The regulator said its preliminary probe raises "suspicion that Elliott group might be working in collaboration/concert with the promoters of AstraZeneca Pharmaceuticals Sweden to facilitate the delisting of AstraZeneca Pharma India Ltd".
During an Offer for Sale undertaken by the Indian company's promoters in 2003, Sebi said, the seller broker (ICICI Securities) had conducted more than 60 road shows prior to the OFS and the OFS floor price was at significant discount to prevailing market price.
"Still only Elliott group was allocated 94.02 per cent of shares offered through OFS and the the Floor price was kept at Rs 490 against the previous day's closing price of Rs 805.3, which made the bids (2.84 times over-subscription) in the OFS hover around this price only.
"This facilitated the Elliott group to mop up almost all the shares (that is 94.02 per cent) offered in OFS at an average price of Rs 625.35 which is lower than previous day's closing price by Rs 179.95," Sebi said.
Sebi said "if suspected concerted/coordinated action of AstraZeneca Pharma Sweden and Elliott group is found