Market regulator SEBI on Tuesday returned the letter of American (Florida) entrepreneur Digvijay Danny Gaikwad, who brought competitive open offer for shares of Railways Enterprises. In the information given to the exchanges, the financial services firm shared the letter sent by SEBI in response to Gaikwad’s proposal. In this, approval was sought to take 55 per cent stake of Railways Enterprises to Rs 275 per share. The regulator’s letter states that the letter of Digvijay Laxman Singh Gaikwad is being returned as this is not an application exempted for the terms of Rule 11 of SEBI Regulation 2011. Sources said Gaikwad’s offer could not stand in front of SEBI as it did not come within the scheduled deadline and it did not follow the correct process of appointing investment bankers.
Gaikwad offered a competitive at 17 per cent premium against the offering of Dabur’s promoter Burman. Gaikwad’s letter stated that an open offer at Rs 235 per share by Burman is at a very low price and the actual assessment of railway enterprises is low and is harmful for common shareholders. Earlier, independent directors of the company had also requested shareholders to pay attention to the low -cost offer of the Burman family. Legal participants said that Gaikwad still has an option to challenge SEBI’s order and can go to securities appeals.
An open offer to get an additional 26 per cent stake of REL from Burman -led units opened on Monday and it is scheduled to close on 7 February. REL may be controlled by Burman after an open offer. The company’s current management under the leadership of Rashmi Saluja is opposing this proposal.
Earlier, Burman objected to Gaikwad’s letter to SEBI, stating that competitive offer should have come within 15 days from the date of public statement, which was October 4, 2023. The Burman group had said that there was no essence of the letter, no authenticity, no indication of any source of money was given and it has been brought to mislead the common shareholders of REL. Earlier, a petition was filed in the Madhya Pradesh High Court demanding monitoring of the acquisition. For this reason, the company’s AGM was banned for a short time.