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Satyam saga: List of cos disclosing pledged share details grows

This article was posted on Feb 4, 2009 and is filed under Stock News

MUMBAI: The list of Indian promoters, who have mortgaged their equity holding to raise funds, is growing by the day. Nearly 10 companies on Tuesday provided the stock exchanges with details of shares pledged by their promoters. Balaji Telefilms, Hind Syntex, Aban Offshore, Bhuwalka Steel, Shree Renuka Sugar and Ganesh Housing Corporation announced on Tuesday that their promoters have raised funds by pledging shares of their companies. Earlier, Asian Paints, Bilpower and Zuari Industries, among others, had made similar disclosures.

Interestingly, ABG Shipyard announced on Tuesday that its promoters had not pledged any shares. Although such a disclosure is not mandatory, ABG perhaps wanted to make it clear that it did not figure among the shipping companies whose promoters have raised funds by mortgaging their equity stake.

Some of promoters of shipping firms, notably GE Offshore, are running the risk of losing management control as they have pledged almost their entire stake.

Balaji Telefilms promoter and veteran Bollywood actor Jeetendra Kapoor pledged 6.6% of his stake in the television company, while Hind Syntex promoters mortgaged 5.3% of their holding. Aban Offshore promoters pledged 8.14%, while the fugure is as high as 30% for the promoters of Bhuwalka Steel and Ganesh Clothing. Shree Renuka Sugar promoters raised funds against their 8.2% stake in the company. None of the promoters disclosed the end use of funds.

Sebi has made it mandatory for publicly-traded companies to disclose the quantum of shares pledged by their promoters in the wake of mounting concerns over the risk of investing in such entities.

“Promoters who pledge shares have to disclose it to the company and the company, in turn, has to disclose it to the stock exchanges. We will carry out an investigation in case of complaints that people are not complying with the regulation,” Sebi chairman CB Bhave had said.

source: Economictimes

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