| Tata Metaliks merger with parent faces challenge in court |
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TATA METALIKS FY ended Net sales (~ cr) Net profit (~ cr) EPS (~) Capex* (~ cr) Stock price (~) 2010 1,048.21 28.57 11.30 6.60 143.44 2011 1,345.35 0.57 0.23 4.88 117.30 2012 1,226.23 - 113.47 - 44.87 34.08 65.59 2013 994.61 - 87.11 - 34.45 125.39 42.85 2014 1,409.76 9.47 3.74 NA 51.90 2015** 356.50 34.32 13.57 NA 76.30 *Difference between gross block + capital work- in- progress over previous year; ** Q1 Compiled by BS Research Bureau EPS: Earnings per share Source: Capitlline ABHINEET KUMAR Mumbai, 28 July Minority shareholders are planning to file an objection against Tata Metaliks' proposed amalgamation with parent Tata Steel in the Calcutta High Court. Minority shareholders led by Kumar Gautam Chauhan had moved the court in March, saying the Securities and Exchange Board of India ( Sebi) required such schemes to be approved through evoting or postal ballot. The company had instead opted for a court- convened meeting of shareholders. Judge J Patherya in an order on March 21 had asked the applicants to file an objection when the proposal came up at confirmation stage. " The proposal has now come for confirmation to the court and the objection will be filed soon," said a Kolkatabased minority shareholder familiar with the plan who did not wish to be named. Chauhan could not be reached for comments. The Tata Steel spokesperson declined to comment. The amalgamation was first approved by the boards of of the two companies on April 10, 2013, with a merger ratio of four Tata Steel shares for 29 shares of Tata Metaliks. This looked fine with Tata Steel's closing price of ₹ 305.5 and Tata Metaliks' ₹ 45.1 on the day. But minority shareholders objected because the announcement came within aweek of Tata Metaliks' new sinter plant being commissioned at Kharagpur. The company had ended 2012- 13 with a loss of ₹ 87 crore so its stock price was depressed, they argued. Also, it had ended the year with a capital expenditure of about ₹ 125 crore, including expenditure on the new sinter plant, which was expected to bring it back into the black. Since then, the Tata Metaliks stock has gained 192 per cent to ₹ 131.4 a share on Monday on the BSE as its earnings improved and it returned to profit. In the quarter ending June, it reported a net profit of ₹ 34.32 crore and earning per share of ₹ 13.57. Tata Steel's share gained 79 per cent to ₹ 547.55 over this period. With this, owners of 29 Tata Metaliks shares can buy seven shares of Tata Steel from the open market instead of the four proposed in the amalgamation scheme. "The stock has gained on the earning improvement and that justifies the concern the minority shareholders had raised when the scheme was proposed," said an analyst with a foreign brokerage who did not wish to be named. Sebi, in a circular on May 21, 2013, had asked companies to conduct a postal ballot or e- voting for various schemes of arrangements, including those involving listed companies and their promoter groups. Companies are required to file an affidavit if their scheme does not fall into this category. Tata Metaliks filed an affidavit, in which it mentioned it was becoming adirect subsidiary of Tata Steel and it did not involve any other entity. "This is a clear case of the company (Tata Metaliks) testing the spirit of the Sebi circular. Minority shareholders should be allowed e- voting and the majority of the minority should prevail," said Shriram Subramanian, founder and managing director of InGovern Research. " The Sebi should also amend its regulations to cover such cases." |
| Cost analysis begins for Sebi special courts |
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Mumbai, 28 July The department of expenditure, the nodal body that oversees public finances, has sought cost- related details for the setting up of special courts under the new Sebi Bill from the department of economic affairs (DEA). The amended Sebi Bill, cleared by the Cabinet last week, mandates setting up of special courts for fast- track resolutions of securities law- related offences. According to sources, the expenditure department has given in- principle approval for establishing special courts. However, it has asked the DEA to outline details such as the number of courts it plans to set up and the cost involved. The Cabinet had approached the department of expenditure to help meet the additional costs incurred while setting up these courts. "Before finalising the fund flow to meet the expenses for the special courts, the department has asked that the DEA should come back with the expected financial liability and how much would it deplete the coffers of the state and central governments," said an official. In 2012, Sebi had proposed to the government to set up special courts to expedite cases. According to the Sebi Act 1992, the regulator has powers to prosecute and impose monetary penalties in fraud cases. Historically, the prosecution has not met with adequate success. In some cases, where Sebi tried to prosecute, the process went on for years. Even as the Cabinet has cleared the Sebi Bill, there is much clarity awaited on how these courts will function. Experts say there may not be a separate bench but civil courts with designated presiding officers to fast- track fraud cases. NPS will no longer be CIS The Sebi Bill cleared by the Cabinet has kept the National Pension System ( NPS) outside the ambit of the Collective Investment Schemes ( CIS). Under the Sebi ordinance, any scheme that pooled money of more than ₹ 100 crore, barring schemes under the Employee Provident Fund (EPF), was a CIS. Experts say this created an issue as NPS was not under the EPF Act. However, the recently approved Sebi Bill has addressed the anomaly by excluding NPS from the definition of CIS. |
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