Ingenious Ways to Deprive Small Shareholders of Their Shares and Increase Promoters' Holdings
Binani Metals Limited
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Binani Metals Limited
Established in 1941, it is the promoter holding company of Braj Binani ( of Binani Cement ) group. Its Registered Office is at 32, Chowringhee Road Kolkata and administrative office at 12, JN Heredia Marg, Ballard Estate, Mumbai .
Directors are Braj Binani ( Chairman ) ; PR Damani ; Dr. Kala Pant ; Nidhi Binani ; JD Mehta ( Executive Vice Chairman ) ; Vinod Juneja ( Managing Director ) ; B. Srinivasan & V . Subramanian
The Company has tremendous Hidden Worth which makes its share very attractive to Collector-Investors
Share capital is Rs. 3 . 5 Crore.
Face Value of the Share : Rs.1000/- ( unique in the history of Listed Shares . But this face value has a reason from promoters point of view ),
Dividend : 25%
The Book Value of its share is Rs. 3500 /-. But if the fair market value of the underlying share holdings is carried out then the real value of the share may in Lakhs.
The Company holds promoter's ( Braj Binani Group ) holding in Binani Industries Limited ( quoted ) and Binani Zinc Limited. The tremendous hidden worth of the Company can be gauged from the fact that as on 31-03-08 the Cost ( Book Value ) of the Quoted shares was Rs. 42 Lakh and the Market Value was Rs. 56 Crore. Unquoted investments have , also ,tremendous hidden value too. They would command many times their Book Value once they are listed . The share capital of Binan Metals is Rupees Three and a Half Crore.
This huge value of the Company appears to be the reason why the promoters are increasing their holdings the over the past few years. The various and ingenious routes taken to do this are :-
RIGHTS ISSUE
A few years ago a Rights Issue was made , at par, in the ratio of 3 : 1 . The objective stated in the Letter of Offer was a real estate project near Mumbai. Majority of the non promoter shareholders did not apply. Unsubscribed shares were allotted to promoters. After this Rights the Real Estate project was , for reasons best known to the promoters , was dropped )
CONSOLIDATION OF FACE VALUE FROM Rs. 100 to Rs.1000
Well, what a masterstroke in the history of Indian Capital Market. As majority of non - promoter share holders were holding below 10 shares or in numbers not in multiple of 10 , the Company devised a unique plan to consolidate the face value from Rs.100 to Rs.1000 . The reason given was that this move would improve liquidity .
Thus , very conveniently , majority of small shareholders were reduced to holders of fractional shares. They were , now , compulsorily paid up and their shares compulsorily sold. And what was the rate at which these were sold ?
Around Rs. 450 for Rs. 100 paid up share or Rs. 4500 for Rs. 1000 paid up share .The deal done by the trustees appears to be a privately negotiated one as there does not seem to have been any official trading in the share since 05-02-2002. And the last officially quoted rate was , also , Rs. 450 for a Rs.100 paid share.
BUY BACK OFFERS
The last buy back offer was made in 2009 at a price of Rs 4500 for Rs.1000 paid up shares ( Same rate as was officially traded in February 2002.
Due to such ingenious efforts , the number of share holders , now, stands around 1760.
Status : Listed at Calcutta Stock Exchange But Illiquid
Worth : Tremendous Hidden Value
( Regulatory authorities like Calcutta Stock Exchange and SEBI did not take any action against these anti small shareholder moves by the Management )
http://www.rareindianshares.info/2011/01/binani-metals-limited-why-face-value.html
Established in 1941, it is the promoter holding company of Braj Binani ( of Binani Cement ) group. Its Registered Office is at 32, Chowringhee Road Kolkata and administrative office at 12, JN Heredia Marg, Ballard Estate, Mumbai .
Directors are Braj Binani ( Chairman ) ; PR Damani ; Dr. Kala Pant ; Nidhi Binani ; JD Mehta ( Executive Vice Chairman ) ; Vinod Juneja ( Managing Director ) ; B. Srinivasan & V . Subramanian
The Company has tremendous Hidden Worth which makes its share very attractive to Collector-Investors
Share capital is Rs. 3 . 5 Crore.
Face Value of the Share : Rs.1000/- ( unique in the history of Listed Shares . But this face value has a reason from promoters point of view ),
Dividend : 25%
The Book Value of its share is Rs. 3500 /-. But if the fair market value of the underlying share holdings is carried out then the real value of the share may in Lakhs.
The Company holds promoter's ( Braj Binani Group ) holding in Binani Industries Limited ( quoted ) and Binani Zinc Limited. The tremendous hidden worth of the Company can be gauged from the fact that as on 31-03-08 the Cost ( Book Value ) of the Quoted shares was Rs. 42 Lakh and the Market Value was Rs. 56 Crore. Unquoted investments have , also ,tremendous hidden value too. They would command many times their Book Value once they are listed . The share capital of Binan Metals is Rupees Three and a Half Crore.
This huge value of the Company appears to be the reason why the promoters are increasing their holdings the over the past few years. The various and ingenious routes taken to do this are :-
RIGHTS ISSUE
A few years ago a Rights Issue was made , at par, in the ratio of 3 : 1 . The objective stated in the Letter of Offer was a real estate project near Mumbai. Majority of the non promoter shareholders did not apply. Unsubscribed shares were allotted to promoters. After this Rights the Real Estate project was , for reasons best known to the promoters , was dropped )
CONSOLIDATION OF FACE VALUE FROM Rs. 100 to Rs.1000
Well, what a masterstroke in the history of Indian Capital Market. As majority of non - promoter share holders were holding below 10 shares or in numbers not in multiple of 10 , the Company devised a unique plan to consolidate the face value from Rs.100 to Rs.1000 . The reason given was that this move would improve liquidity .
Thus , very conveniently , majority of small shareholders were reduced to holders of fractional shares. They were , now , compulsorily paid up and their shares compulsorily sold. And what was the rate at which these were sold ?
Around Rs. 450 for Rs. 100 paid up share or Rs. 4500 for Rs. 1000 paid up share .The deal done by the trustees appears to be a privately negotiated one as there does not seem to have been any official trading in the share since 05-02-2002. And the last officially quoted rate was , also , Rs. 450 for a Rs.100 paid share.
BUY BACK OFFERS
The last buy back offer was made in 2009 at a price of Rs 4500 for Rs.1000 paid up shares ( Same rate as was officially traded in February 2002.
Due to such ingenious efforts , the number of share holders , now, stands around 1760.
Status : Listed at Calcutta Stock Exchange But Illiquid
Worth : Tremendous Hidden Value
( Regulatory authorities like Calcutta Stock Exchange and SEBI did not take any action against these anti small shareholder moves by the Management )
http://www.rareindianshares.info/2011/01/binani-metals-limited-why-face-value.html
1 comment:
Nice post about Binani Metals Limited. This is help to me know about Binani Metals Limited Unlisted Shares Details and Stock Market Price.
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