FIPB rejects Jumbo bid to up Shaw Wallace stake

ahmedabad: jumbo worldwide holdings’ proposal to raise its stakes in shaw wallace and falcon tyres has been rejected by the foreign investment promotion board (fipb). this is because of a pending litigation initiated by sebi against certain promoters. according to sources, jumbo worldwide had proposed to raise its existing stake in shaw wallace from 39.07 per cent amounting to rs 18.75 crore to 43.93 per cent amounting to 21.08 crore in the paid-up capital of rs 48 crore. the company proposed to do this by purchasing 23,30,956 shares of rs 10 each of shaw wallace from the resident shareholder, matter and platt india. besides, the company had also proposed to acquire up to 100 per cent of shaw wallace’s shares. sources pointed out that this part of the proposal was not supported by the board resolution of shaw wallace. the proposal did not envisage setting up of a liquor manufacturing unit, but only raising stake in shaw wallace. in a separate application, jumbo had proposed to raise its stake in falcon tyres from 0.06 per cent to 30.71 per cent in the paid-up capital of rs 6 crore. however, the company also proposed to acquire up to 100 per cent equity of falcon. in fact, even this part of the proposal was not supported by the board resolution of falcon, sources pointed out. sources say when the proposals came up for discussion, the ministry of food processing industries conveyed no objection, subject to comments of the department of economic affairs and department of chemicals and petrochemicals. both the proposals of jumbo worldwide were rejected by the fipb on the grounds that a prosecution initiated by sebi against certain promoters of the company was pending in the mumbai high court.