The offer for sale (OFS) of Veedol Corporation, a lubricant maker, which was shelved on May 23 by the seller – state-owned Andrew Yule & Company – citing ‘some technical glitch’ was in fact withdrawn, as the seller company's demat account had been suspended over compliance-related issues, Moneycontrol has learnt.
A market source familiar with development told Moneycontrol, “Andrew Yule & Company’s account with an MNC broker was suspended due to compliance-related issue. Before planning for the OFS this was not checked by the seller.” Usually, before planning any such sale, the broker is communicated in advance and all details are checked and re-confirmed, but this was not done by Andrew Yule & Co, leading to the withdrawal of OFS.
“This is a rare incident where an OFS is withdrawn because of suspension of demat account. Generally, all due diligence is done before placing the shares for sale,” another source told Moneycontrol.
Andrew Yule & Company has not yet replied to Moneycontrol’s query on the nature of technical glitch despite multiple reminders. Andrew Yule is one of the promoters of Veedol Corporation, holding 26.23 percent shares of the company, as per March quarter’s shareholding data.
An OFS is a process through which listed companies are allowed to sell their shares via the exchange platform, and it is considered as a simple method through which promoters reduce their stake in companies.
Andrew Yule & Company is a public sector undertaking with product range from tea to transformers and effluent treatment plants, and had planned an offer for sale (OFS) to offload shares of Veedol Corporation. In an exchange filings, the company mentioned, “The Offer shall take place over two trading days on a separate opening and closing of the window of the Stock Exchanges on May 23, 2025 (“T Day”) Offer and May 26, 2025 (“T+1 Day”), from 9:15 a.m. and shall close at 3:30 p.m. (Indian Standard Time) on both days”.
Andrew Yule & Company had planned to sell around 2 percent or 3.48 lakh equity in Veedol, and exchanges were notified for the same by Veedol on May 22.
However, on May 23, the seller Andrew Yule & Company, informed Veedol that due to ‘some technical glitches’ the notice of offer for sale of Veedol shares has been withdrawn. The depositories NSDL and CDSL both had denied any technical glitch at their end, and so did the MNC bank broker with which the company had a demat account.
Sellers in an OFS are allowed to withdraw the sale at any time before opening of the offer but with a cooling period of 10 trading days from the date of withdrawal of OFS. The OFS can also be cancelled in case sufficient number of buyers are not found, but it is rare that a company has to cancel its OFS because its trading account being suspended.
Usually, a trading account can get deactivated if transactions do not happen and the account remains inactive for a long time. At times, KYC-related issues can also lead to an account turning inactive. If a freeze request had been made and the account owner forgot to request defreeze, then too, transactions can fail to happen, however, it is not clear what led to the suspension of the account of Andrew Yule & Company.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
