Really poor corporate governance – allowing for promoters to come in at face value, not even at book value is the equivalent of taking out all extra juice. if anything, it should be at least linked to performance milestones – a carte blanche dilution at one go is’nt a great sign. This could have also been done through recapitalization too. Rights issue done at par, the majority shareholder renouncing it completely ot favour a minority shareholder in an unlisted company at the expense of minority shareholders in the listed entity is definitely not value accretive in the short run for sure. Why did’nt they do a price discovery and allow for ajit isaac to bring in cash as a preferential allotment ?
the threshold of 26 % had to be crossed to provide for veto powers to ajit isaac – so that he has a say in the board. That’s the only reason why this could be happening.
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