Coversion of warrents By RIL????

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Despite the warrant conversion, the promoter group’s stake is below the 51.37% it held in the company on June 30, 2008. A close inspection of RIL’s shareholding pattern reveals considerable changes in the promoter group’s holding during the July-September quarter.

Promoters’ stake had gone down from 51.37% to 44.8% — representing a decline of 9.54 crore equity shares — between July 1 and September 30, 2008. After the warrant conversion, this has gone up to 49%.

During the September quarter, nearly 9.42 crore shares were transferred from the promoter group to various RIL subsidiaries and are now classified as public shareholding, but with non-voting shares.

Replying to questions on these transactions, an RIL spokesperson said: “Eight body corporates holding 9.42 crore treasury shares of RIL for the benefit of its shareholders, have since become subsidiaries of RIL.”

“As a result, these shares do not enjoy voting rights and cannot be classified under promoter group. The promoter group companies have not sold any RIL shares for subscribing to warrants,” the RIL spokesperson added.

The spokesperson also said that loans from RIL to these companies were converted to equity share capital. However, he said that he can’t elaborate on the events that triggered the transfer of ownership in these eight body corporates or the price at which they were transferred.

Source: Times Of India.

Dear Friends

Can anybody explain me what the situation likely is?

This is really very interesting stuff. Now, lets have an discussion over this issue?

Replies (2)

Subsidiary Companies are prohibited from becoming a member of a holding Company.

Promoters of A Ltd can aquire its own shares  from public through an unknown entity  which will be later aquired by A Ltd effectively reducing the public holding.

SEBI should make provisions to include these shares to promoter holdings as these Companies are free to transfer it and make it voting shares at any time at their will.

What are treasury shares?

What happens when a holding company transfers shares to its subsidiaries?

does the basic definiton of shares ceases on such transfer?

I find these questions from the above discussion?

 

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