Shareholders of the Hyderabad-based company allege that the announcement related to delisting was done with a motive of pushing up the stock price and that there was never a serious intention of getting the entity delisted from the bourses. The company is currently listed on the Bombay Stock Exchange and the Delhi Stock Exchange.
Shareholders told FE, on condition of anonymity, that the ballot forms were sent just days before the deadline and the whole process was managed in a way that a majority of shareholders could not exercise their votes. According to Bloomberg, shares of Transgene Biotek surged nearly 30% in a span of 20 days to a high of R14.20 (from August 27, when the decision to consider delisting was announced, to September 17, when a merchant banker was appointed for the purpose).
The average daily volume in the period rose to 23.12 lakh shares against 7.28 lakh shares in April-November. Since the highs of September 17, the stock plunged over 60% to R5.10 as of November 15.
They (Transgene Biotek) announced delisting of shares with a price tag which was about 2.5 times the market price and put out a deluge of forward looking statements so that the stock price would move higher, said a Transgene investor who holds nearly a lakh shares and did not wish to be identified.
Which investor would not want the company to delist at R25 when the current stock price is around R5 asked another Transgene investor. An email query sent to the company on Saturday remained unanswered till the time of going to press.
Repeated attempts to get in touch with the company officials and the registrar also proved futile. Investors allege that since all shareholders could not participate in the ballot, the delisting proposal was rejected based on the number of votes that were received prior to the deadline November 6.
Through discussions with a group of investors holding a sizable amount of Transgene's shares, it was ascertained that many investors did not receive postal ballot forms. What is the mystery behind postal ballots not being received by several investors I have spoken to, across the country asked the shareholder quoted earlier. To seek shareholders' approval on delisting of shares from the BSE and the Delhi Stock Exchange, the company approved the notice of postal ballot on September 20 and fixed October 5 as the date of completion of dispatch of notice along with postal ballot to all its shareholders.
Another investor said he received the form just four days before the deadline for the ballot forms reaching the scrutiniser. The investor said: Since the postal ballot forms were dispatched via registered post and were self-addressed, it would be impossible for my form to reach the company on/before the last date of receiving ballot forms.
Shareholders have also raised doubts over the promoters' motive to delist the company as the latter hold less than 10% in the Hyderabad-based entity. Given the stringent delisting guidelines and rare instances of delisiting attempts in the Indian market, promoters could have first increased their stake through creeping acquisition, they say.