Source Business standard
| Promoters cash in on bull run to get their pledged shares released | |||
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Mumbai, 12 June The bull run on the stock markets and asset sales have helped promoters of a host of companies, including JSW, J P Power and United Spirits, get their pledged shares released from financial institutions and increasing their unpledged holding in their firms. Since April 1, promoters of Jaiprakash Associates have released more than 225 million Jaiprakash Power Ventures shares (valued at ₹ 425 crore) pledged with lenders. This was after Jaiprakash sold its two hydro projects in Himachal Pradesh to Abu Dhabi- based Taqa to raise ₹ 10,500 crore in March this year. With this, the Gaurs successfully reduced their pledged shareholding by 7.7 per cent in JP Power Ventures, though the level of their total pledged shares is still high. Similarly, steel baron Sajjan Jindal also managed to reduce his pledged shares in both flagship firm JSW Steel and JSW Energy. The Securities and Exchange Board of India (Sebi) norms make it mandatory for promoters to declare their pledged shares with lenders to the stock markets. These shares are pledged with banks and financial institutions in lieu of loans; if the share prices fall, the promoters are asked to " top up" more shares. "As the value of shares is going up, the mark- to - market value of borrowed capital companies have to keep with financing institutions is going down. This is resulting in some of the shares getting released," said Dilip Bhat, joint managing director of the Prabhudas Lilladher group. Analysts say the percentage of promoter holding pledged with lenders provides interesting cues in identifying those whose financial health is showing signs of improvement or deterioration. " The high levels of pledges are a cause of concern for shareholders because if these stocks are invoked and sold in the market, the stock prices will tumble," says Ambit Capital's Gaurav Mehta in a report dated June 11. So, while the promoters of realty major Unitech managed to reduce their pledged shares, one of the firm's lenders, IDFC Ltd, also exercised its right to invoke the encumbrance with respect to 5.1 million shares ( 0.2 per cent of outstanding shares). Turn to Page 19 > OPPORTUNE TIME Pledged shares released ( net) No of shares % of total Value* Company ( mn) equity in ₹ cr >JP Power Ventures 225.20 7.70 425.66 >JSWEnergy 79.70 4.90 524.24 >Motherson Sumi 27.30 3.10 748.72 >Max India 7.90 3.00 190.60 >JSWSteel 6.90 2.90 807.91 >Unitech 44.40 1.70 94.94 >United Spirits 2.00 1.40 561.40 >Aurobindo Pharma 2.90 1.00 174.72 >Amara Raja Batteries 1.50 0.90 62.39 >Asian Paints 3.00 0.30 151.31 *Calculated according to the average market capitalisation since April 2014 Source: Ambit Capital, Capitaline, Ace Equity | |||
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| Madhu Kapur allowed to challenge YES Bank AGM resolutions | |||
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Mumbai, 12 June The high court here on Thursday said Madhu Kapur, widow of YES Bank co- founder Ashok Kapur, would be allowed to challenge all the resolutions that might be approved at YES Bank's annual general meeting ( AGM) on Saturday. At the AGM, shareholders will vote on seven resolutions, including the appointment of directors, which had first led Kapur to challenge Rana Kapoor, the bank's managing director and chief executive, in court. It is expected the results of the vote will be known by June 15. On Thursday, judge G S Patel also directed Rana Kapoor to share with Madhu Kapur the bank's communication with the Reserve Bank of India (RBI) and the Securities and Exchange Board of India ( Sebi). However, the court said the information provided to Kapur couldn't be circulated or put in the public domain. YES Bank has sought approval from RBI and Sebi on moving Madhu Kapur out of the promoter category. "Madhu Kapur, being successor of the late Ashok Kapur, cannot be considered an Indian partner or India promoter and, accordingly, cannot inherit the rights under Articles of Association or the status of promoter of YES Bank," the bank had said in a statement in April. Currently, Kapoor holds 11.87 per cent stake in YES Bank, while Madhu Kapur and her company own 10.37 per cent. Dinyar Madan, Kapur's counsel, argued most of the resolutions being tabled for shareholder approval would have to be approved by the court. For instance, he said, the remuneration of directors Ravish Chopra and M R Srinivasan is to be approved by the board at the AGM, but their appointment had been challenged in court. Ashok Kapur had co- founded YES Bank with his brother- in- law Rana Kapoor. Madhu Kapur and Bindu, Rana Kapoor's wife, are sisters. Last year, Madhu Kapur had moved the Bombay High Court, claiming her right as co- promoter was violated, adding she wasnt consulted before the lender had appointed directors on its board. The next hearing in the case is scheduled for June 23. Currently, Rana Kapoor holds 11.87 per cent stake in YES Bank, while Madhu Kapur ( pictured) and her company own 10.37 per cent |
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Source Business Line
Ordinance to empower SEBI to become an Act
OUR BUREAU
TRAI, Polavaram Ordinances will also be converted into Acts: Venkaiah
NEW DELHI, JUNE 12:
Three Ordinances, including one to empower SEBI to curb ponzi scheme, and removing legal hurdles for the appointment of Principal Secretary to the Prime Minister, will be converted into Acts during the Budget session starting next month.
"They will continue to be in force (till the next session)," the Parliamentary Affairs Minister M Venkaiah Naidu told reporters here. SEBI Ordinance was re-promulgated by the previous Government on March 29, while Polavaram Ordinance (under Andhra Pradesh Reorganisation Act) and TRAI Ordinance were promulgated last month.
Article 123 of the Constitution says that the President can promulgate an Ordinance between two sessions of Parliament, if the matter requires immediate action. An Ordinance has the same force and effect as an Act of Parliament. But, converting an Ordinance into an Act needs to be approved by both the houses of Parliament in the next session. Otherwise, the Ordinance expires six weeks from the time Parliament begins its session. The Government has already led all the three Ordinances in the Parliament and it needs to get them converted into Act by July 15.
SEBI ordinance
The Ordinance aims to provide more teeth to the capital market regulator SEBI to act against ponzi and fraudulent schemes, assessing call data record in securities related offences besides others. The Ordinance was brought in lieu of the Securities Laws (Amendment) Bill, 2013, which aims to amend three laws, namely, the SEBI Act, 1992, the Securities Contracts (Regulation) Act, 1956 and the Depositories Act, 1996. The previous Government failed to get amendment approved by the Parliament which resulted in re-promulgation twice.
TRAI ordinance
On May 28, the Government brought an Ordinance to amend the TRAI Act to allow former Chairpersons to hold Government jobs post retirement. This was done to pave way for Nripendra Misra to take over as the Principal Secretary to Prime Minister Narendra Modi.
Under the earlier rule, the TRAI Chairperson or any member could not take further employment under the Central Government or any State Government after ceasing to hold office. Misra, a UP-cadre IAS officer of the 1967 batch, was Chairman of TRAI from March 2006 to 2009. But the Ordinance allowed former Chairperson and members to take employment two years after they demit office. The Ordinance also permits them to get employed in the private sector other than telecom companies during this cooling off period. The earlier law had banned employment across all commercial entities.
Polavaram ordinance
On May 29, the Government promulgated an ordinance to pave way for the transfer of 136 villages, 211 hamlets and seven mandals of Khammam district to the State of Andhra Pradesh to execute the Polavaram project.
The Ordinance on Polavaram was necessitated as the proposal is not part of the Andhra Pradesh Reorganisation Act, 2014 approved by Parliament in the last session of the 15th Lok Sabha as the UPA government chose to make it as an after thought.
(This article was published on June 12, 2014)
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