Govt offloads 6.31% to CMC employees at Rs 66/share

The government has further offloaded 6.31 percent of its CMC shares to employees at the rate of Rs 66 per share. This brings down the government's holding in the company to 26 percent now. The offloading of the shares was in tune with the government stipulation made before the disinvestment that some portion of the government stakes would be given to employees. "As such these shares cannot be categorized as ESOPs since they are not fresh issues but made from existing shares. At best what has happened here is 'transfer of share' from one entity to another," said Vivek Aggarwal, Company Secretary, CMC.

The total number of shares issued to employees was around nine lakh. Employees would hugely benefit from this issue since the current share of the company is hovering in the range of Rs 500 per share in the market. 

However, certain sections of the employees were unhappy with the delay in receiving the share certificates. Company officials attribute it to administrative formalities and normal time taken to get government clearances. Said SS Ghosh, CEO and Managing Director of the company, "We have also issued shares to employees working in the American subsidiary BRI. In such cases you need clearance from the FIPB and the RBI and the delay is built into the process."

Financial analysts agree it is normal to take around two months or so when so many clearances have to be taken. The process began sometime in April during which employees were given about a month to apply for the shares and the certificates were issued on June 28.

Refuting speculation that the company could have deliberately delayed the process in order to capitalize on the interest of the money paid by employees, Ghosh said, "The transaction is between two entities which is the government and individual employees. The company comes nowhere in the picture till the time the Deed Transfer has taken place. This can happen only after all the government clearances. As soon as the clearances were received we issued certificates to employees." 

The argument is validated by the Finance Director of a leading company, "Once the Deed Transfer takes place the Company Act comes into play and the company can then be hauled up for the delay. Until then, it is a transaction between two entities."

It may be recalled that CMC was taken over by TCS when the government divested 51 percent of its holding for a sum of Rs 152 crore last September.

Balaka Baruah Aggarwal 

(CNS)