James Hotels shareholders allege owners trying to increase equity without consent

The hotel ownership changed hands in 1998 when two NRI picked up a majority stake of 60 percent in the hotel for a sum of Rs 6 crore. The promoters then took a loan of around Rs 75 crore from the State Bank of Patiala in order to refurnish the hotel.

According to a recent evaluation by SBI,the net asset value of the company stands at above Rs 400 crore and the book value per share of the company at above Rs 450 crore.

The Park Plaza hotel,which is under construction will soon start operations,but before that the company promoters have sent a postal ballot to the shareholders to seek their vote on the decision to increase their equity share.

Speaking to Newsline,Vikas Garg,company secretary and a shareholder said,“The current majority shareholders,who are both NRIs,want to increase their equity in the company. For this they have started sending a postal ballot to all the shareholders,but many shareholders have not yet received their ballot as the company has no records or the address mentioned have been deleted or tampered with.”

He added that without all the shareholders receiving the postal ballots the whole process becomes unfair.

“If the current equity of the promoters is increased to 90 per cent,minority shareholders will end up losing over Rs 140 crore as the authorised holding of the promoter company will go up from 60 percent to 93 percent leaving only 7 percent to the public who previously owned over 40 percent of shares,” said Garg

SK Madan,a shareholder in the company said,“I hold 7,500 shares of the company,yet I have not received the postal ballot. When I checked up with the company,my name does not figure in the list of shareholders.”

The shareholders have also accused the company of not issuing them duplicate postal ballots.

They further alleged that the company was denying them their right to inspect the company records as no such record has been maintained by the company.

The shareholders have now written to SEBI,BSE and registrar of companies regarding this matter.