The allegation is based on the fact that Sterlite has called for an extraordinary general meeting (EGM) on June 12, which comes 10 days after the closure of the open offer. At the EGM, the company will seek shareholders approval for investing over 30 per cent of its net-owned funds in Indal, as required under the statutes of Sec 372.

Alcan is believed to have pointed out to SEBI that Sterlite has "presumed" Department of Company Affairs (DCA) and shareholders' approval for the Rs 818-crore investment, where it should have actually obtained them long before June 2, the closing date of the open offer.

Alcan has also pointed out that the formalities of the open offer be completed by Sterlite within a month of theclosure of the offer, that is, July 2 as per the stipulations of the takeover code. This includes sending out of acceptance letters to investors who wish to cash out. Sterlite would, in case the government clearance takes even the usual norm of six weeks, therefore, either have to complete the formalities without full government clearance or delay the formalities till such clearance is available.

Alcan has pointed out that while stipulations exist in the takeover code on extension of the deadline for formalities to be completed, such extensions can be allowed only to companies who at least hold their EGMs on time to get their shareholders' approvals and then do not get the government clearance owing to procedural problems. The code does not apply to companies which actually try to seek shareholders' consent after the offer itself has closed, they have complained. Alcan has also contested the mode of payment as stated by Sterlite in its latest public announcement. The Sterlite revised bid does not specifythe conversion ratio for the optionally convertible preferences shares (OCPS) which can be converted into shares of Sterlite at the option of Indal shareholders.

As reported in The Financial Express yesterday, Alcan has its reservations over whether the "objective" of an open offer can be changed by any bidder. Sterlite had earlier stated that its 20 per cent proposed acquisition in Indal was a long-term "friendly" investment, but with Sterlite now hiking the size to 52.03 per cent, its only interest can be management control, feels Alcan.

The Canadian major also feels that if Sterlite's new mode of payment is allowed, it will not give Alcan a level-playing field. This is because Sterlite will able to offer Indal shareholders, including the financial institutions, its own shares, whereas Alcan is not permitted by the law to offer its shares to the Indian public and institutions.

Meanwhile, Sterlite sources say that since SEBI is yet to cite any objection to the open offer at Rs 221, no problem isexpected.