Banks’ ADR/GDR voting rights curbed

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New Delhi, Mumbai, Aug 31: The government’s decision to harmonise the voting rights concerning ADR/GDR holdings with the relevant provisions of the Companies Act and the Reserve Bank of India would deal a body blow to the managements of some private banks like ICICI Bank and UTI Bank.

At present, ICICI Bank has an ADR shareholding of about 27.25% and UTI Bank has a GDR shareholding of about 12.19%. According to government sources, the ADR/GDR holders (with their huge voting strength) always lend their weight to the bank managements.

“By specifying that the voting rights of ADR/GDR holders would be as stipulated by RBI, the government has restricted it to 10%,” said a source.

Investment banking sources said several companies had raised funds from overseas markets during the last two years through ADR/ GDR and FCCB instruments. There are nearly 159 companies listed on various exchanges abroad. Of these, seven are not listed in India. These are Rediff.com, Reliance Ports & Terminals, Reliance Utilities & Power, Team Asia Semi Conductors, Dishnet DSL Ltd and Quintant Services.