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Kohinoor Mandal
Calcutta, Feb 27: The Bank of Rajasthan's proposed rights issue has been stayed by a civil court in Calcutta on a petition filed by a minority shareholder alleging violation of the takeover code.
Giving the ex-parte order on January 21, the fourth court of civil judge (senior division) at Alipore also issued show cause notices to the Tayals, Keshav Kumar Bangur and the directors of the company.
However, neither the two Tayals (Praveen and Sanjoy) nor the 15 others named have filed a reply to this ex-parte order.
The court also ordered the board-which was scheduled to meet on January 24 -to stay away from taking a final decision on the rights issue.
Shiv Ratan Agarwal, a shareholder with 1,800 equity shares of the bank, has alleged in his petition that the proposed rights issue is an illegal ploy hatched by Praveen Kumar Tayal "in a clandestine arrangement" with Keshav Bangur to acquire a majority stake in the company, violating the takeover code and the interests of the minorityshareholders.
"...the proposed rights issue is not beneficial to the company and is a dubious method sought to be adopted by the defendant No. 3 (Praveen Kumar Tayal) and his group with the support of the defendant No. 2 (Keshav Kumar Bangur) and his nominees to illegally acquire the majority or controlling shareholding interest in the defendant company," Agarwal stated in his petition.
Agarwal alleged that the Bangurs and Tayals have decided between them that Keshav Bangur will not subscribe to the proposed rights issue, after which the board of Bank of Rajasthan will allot it to the Tayals.
"...a board meeting of the defendant company was held in or about the beginning of December 1998 whereat discussions were held inter alia for making issue if right shares of the defendant company. So far as your petitioner has been able to ascertain, a bulk shareholders of the defendant company No.2 proposed not to exercise their right to receive shares in the proposed rights issue.
Consequent upon suchshareholders not exercising their right to receive such shares, it would be open to the Board of Directors of the defendant company to allot such shares to such persons as the Board may deem fit," Agarwal said.
He also noted that, with the board totally in control of the Tayals, the allotment will be made in their favour. In the petition Agarwal added: "The only motive for such exercise of a rights issue is to try and bypass the provisions of the said takeover code."
According to the takeover code of the Securities & Exchange Board of India, if any person wants to acquire more than 10 per cent shares of a company, then he will have to make an open offer through a public announcement to give the minority shareholders an equal opportunity.
Copies of the court order were sent to union finance secretary Vijay Kelkar, Reserve Bank of India governor Bimal Jalan, Sebi chairman DR Mehta and the directors and secretaries of the stock exchanges of Calcutta, Jaipur and Delhi.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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