Cos start divulging pledged share data
Voluntary disclosures before SEBI guidelines.
Our Bureau
Kolkata, Jan. 28 Voluntary disclosures have begun to trickle in before SEBI has
made the necessary notification for mandatory disclosures by promoters
regarding shares pledged by them.
The SEBI board on January 21 decided to make disclosures compulsory but has not
yet spelt out how and when these are to be made.
Early disclosures
Among the early disclosures were those of promoters of Godrej Consumer
Products, United Spirits, MindTree, JSW Steel and Asian Paints.
According to market analysts, there may be a stream of disclosures after SEBI
notifies the norms.
Mr Saurabh Mukherjea, head of investment advisory Noble, said a conservative
estimates of around 5 per cent of promoters' holdings could be pledged with
financiers.
"Pledging of shares by promoters is material information for other investors in
determining valuation of the company, as it indicates cash flow problem and
also provides clues to promoters' views on the company," he added.
'Honourable intentions'
According to Mr Arun Kejriwal of KRIS, the practice of pledging shares to
garner cash by promoters for their own interest has been widely prevalent. "But
since the law did not provide for such disclosures, many could get away
unnoticed," he said.
However, Mr Kejriwal added that he would like to make a distinction between
promoters with "honourable intentions" and others.
According to brokerage house Prabhudas Lilladher, promoters pledging their
shares with financiers such as banks and NBFCs has become an important criteria
for investors in making their investment decisions.
Survey data
Last week, it ran a quick survey among a number of companies it tracks. It
found out that a large number of companies responded by indicating that they
could not confirm if promoters have pledged shares.
Nine companies gave the percentage of holdings pledged with financers.
Pledge revelation
The data revealed that KEI Industries (6 per cent), Nagarjuna Construction (12
per cent), Rolta (2.5), Great Offshore (14.88), Bharti Shipyard (5.45),
Peninsula Land (14), Shree Sugar (10), Bombay Rayon (1.4) and XL Telecom &
Energy (20 per cent) have pledged shares. Gayatri Projects and Indage Vinters
did not mention how much (in percentage terms) was pledged.
http://www.thehindubusinessline.com/2009/01/29/stories/2009012951871100.htm
ekamber
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