Mumbai: The board meeting of Larsen & Toubro held on 7 December 2002 to discuss the recommendations by its committee on a proposal for equity investment in its cement division ended inconclusively, with a section of the board asking for more time to study the issue.

The committee, set up by the board to study the proposal, tabled its report at the meeting. L&T officials say the discussions will continue into the next board meeting, the date for which will be decided next week. It is not known whether there were other items in the agenda.

The board was in full attendance, including Kumar Mangalam Birla and Rajshree Birla. The meeting lasted for nearly one-and-a-half hours, the L&T officials say.

L&T had recently received several proposals for equity investment in its cement division, which is planned to be demerged into a separate company. The committee had chosen one of the proposals for consideration. It is learnt that this proposal is from the UK-based Commonwealth Development Corporation.

The demerger issue has been the subject of much attention recently, in the context of Grasim being asked last month to put on hold its open offer for L&T shares. It is learnt that the directors representing the AV Birla group, which has a 15-per cent stake in L&T, sought more time to study the proposal in detail.

The induction of a financial investor could reduce Grasim’s stake in the newly-demerged cement company. This could also leave Grasim with a substantial stake in L&T, which, without its cement division, would have few synergistic interests with Grasim.