Chief Minister Oommen Chandy has said that while the State government has a very open mind to the demand of the minority shareholders of Cochin International Airport Limited (CIAL) for a rights issue at par, it can do only as much as permissible within the parameters of existing laws.
Demand for rights issue to minority shareholders was the recurring theme at an Extraordinary General Meeting (EGM) of the airport company held here on Saturday with shareholders raising the plank.
“We will consider your demand favourably and do everything within the ambit of law to meet that. You shareholders will be taken into confidence in the exercise,” Mr. Chandy said while venturing to take suggestions from experts in company law from among the shareholders. He said that the government was in agreement that as shareholders who invested in the project long before it turned profitable, they should be part of the growth of the airport.
Shareholders agreed to the out-of-court proposal of issuing one crore shares at par to the Housing and Urban Development Corporation Limited (HUDCO) to bring an end to the long-pending legal battle. At the same time, minority shareholders raised the argument that if HUDCO could get shares at par why could they, who had invested in the company when there was uncertainty over the return, not be given additional shares at par. They wanted the special resolution placed before the EGM to be amended, and their demand included in the minutes of the meeting. However, company secretary R.Venkiteswaran said that it was against the company laws.
Some shareholders also expressed doubt about the need to issue shares to HUDCO when there was no court ruling to that effect. However, the secretary said that the rulings so far had been over technical aspects and the outcome of the verdict of lower court on the issue could not be predicted.
not only as a share holder of CIAL, but also as a lawyer, i can say that the deal is absolutely illegal and seems to be consequence of some illegal gratification. if debt was to be converted into equity, then 1) y did hudco refuse in the fist instance 2) y was the book value of the shares not considered 3) y IPO was not preferred in the first instance which would have easily demonstrated the actual share price 4) y is more than 3% of the company's worth sold for only a petty amount? hope some day, law would prevail in our country
If the minority share holders of 12000 were given a chance to apply for ten thousand shares each at par ,it would have amounted to 120 crores which would have been sufficient to repay back the loan from HUDCO. This out of the court settlement had only benefitted HUDCO
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