DLF apologises to minority investors

In a major step down from its stated position, India's largest real estate company, DLF Universal, has apologised to its minority shareholders...

In a major step down from its stated position, India8217;s largest real estate company, DLF Universal, has apologised to its minority shareholders and assured them that steps would be taken to settle the dispute over the rights debentures issue within one month.

In a meeting with minority shareholders today, vice chairman of DLF, Rajiv Singh apologised for not redressing the grievances of minority shareholders earlier and assured them that an advisory committee would be set up to look into the modalities of how the issue could be resolved. Singh reportedly said that the company would ensure that the settlement is in favour of shareholders.

8220;The company has admitted that it made a mistake and has assured us that our rights would be taken care of. It also said that Sebi and Ministry of Company Affairs MCA had enquired about the issue and DLF wants to settle it before venturing into the capital market again,8221; said MS Tanwar who is a minority shareholder with the company.

The company on its part has said that 8220;it will settle a few issues8221; and then come up with a statement in the next couple of days. It is learnt that today8217;s meeting lasted for less than an hour and was attended by 35-40 minority shareholders.

The meeting was the first overture from the company addressing the claims of its minority shareholders after its IPO was called off last month. While the promoters of the company own 99.5 per cent stake in the entity, there are 1,308 minority share holders who have the residual stake. The controversy had erupted when the company had made a rights issue of partially converted debentures in a 1:1 ratio in December last year. Almost 90 per cent of minority shareholders had cried foul alleging that no intimation about the issue was made to them. The shareholders had written to Sebi alleging breach of trust and the matter is pending before MCA.

However, despite Singh8217;s apology and promises, small shareholders are still suspicious of the company8217;s motives. 8220;The company did not come with any concrete plan as to how it plans to settle the debenture issue. Instead they made a lot of promises and it all seems to be delaying tactics,8221; said Kamal Bhatia, a shareholder in the company.

When contacted, the company spokesperson confirmed the meeting and said that a statement to the effect will be made during the next two days. The resolution of this issue is important for the company, if it is to revive its IPO.