Former GIC, LIC nominees agree to return L&T Esops

Mumbai, May 28 | Updated: May 29 2007, 05:44am hrs
Two former nominee directors of LIC and GIC, who had triggered a legal battle after cornering employee stock options (Esops) of engineering major Larsen & Toubro, are now heading for a settlement.

Sources close to the development have confirmed that in a settlement, BP Deshmukh, former nominee director, GIC, and Kranti Sinha, former nominee director, LIC, have agreed to return the Esops to their respective companies. Both LIC and GIC had taken the two nominee directors to the Bombay High Court on this.

Also, these two companies fear that the nominee directors, like on earlier occasions, may renege. We would prefer to wait for the final deal before commenting officially, said executives of LIC and GIC.

The court had set June 12 for hearing the case filed by GIC and LIC.

The two institutions had maintained that the nominee directors could not claim L& Ts Esops as they were just representing LIC and GIC. But the two directors did not accept the argument and had gone ahead to buy the Esops at a discounted price.

As a result, their nominee directorship was withdrawn. The court had restrained these two directors from dealing with L& T Esops.

The Esops, ranging from 10,000 to 30,000 shares, were exercised by both the nominee directors at a discounted rate of Rs 35 a share when the L&T share was Rs 1,600.