Satyam promoters share-pledging gets curiouser

The company has already admitted that the entire stake of 8.3 per cent 5.57 crore shares held by the promoter firm SRSR Holdings has been pledged with lenders. Between December 23,2008 and January 5,2009,ILamp;FS Trust Company sold over 2.45 crore shares representing 3.64 per cent stake of Satyam Computer. These pledged Satyam shares have been sold by ILamp;FS on specific written instructions of the said debenture holders and lenders, ILamp;FS Trust informed the stock exchanges on January 6. Satyam chairman B Ramalinga Raju came out with the explosive revelations and resigned on January 7.

On January 8,lenders sold another 85.30 lakh Satyam shares,which were pledged by the promoters,in open market transactions. After the sale,SRSR Holdings now have 1.57 crore shares representing 2.34 per cent stake in Satyam,which includes over 1.23 crore pledged shares already transferred to lenders.

On January 7 itself,Sebi ordered an investigation into the affairs relating to buying,selling or dealing in the shares of Satyam Computer. The investigation will also ascertain whether any provision of the Sebi Act or regulations/rules has been violated, Sebi said. When contacted,senior Sebi officials did not comment on the issue.

As the Raju family pledged their holdings at a time when the stock was quoting at a high level,they would have already pocketed a huge amount even after taking into account the lenders margin. Pledging of shares by promoters is a rampant exercise in India Inc. The catch here is that theres no regulatory requirement to report or disseminate the pledging of shares to the regulator or the investors. Some promoters had pledged their stake to hike their stakes in their companies while others used the money to ramp up the share prices of their own companies, said Ashok Ajmera,CEO,Ajcon Global.

Did lenders know about the Rajus plight? The Sebi probe will bring out the facts. If the securities he had pledged for raising money decreased in value beyond a certain point,the borrower would be forced either to deposit more money in the account or allow the lender to sell off some of borrower8217;s assets,Ajmera said.

If the Rajus had pledged the shares when the share price was above Rs 500,he would have got around Rs 1,400 crore as against the actual value of Rs 2,800 crore from the lenders. Lenders normally slap a margin money the difference in the value of shares pledged and the loan amount sanctioned of 50 per cent for physical shares. If a promoter wants to borrow Rs 100 crore,then he will have to pledge shares worth Rs 200 crore. The margin for demat shares could be even less at 35 per cent as electronic transfer is faster and cheaper.

Promoters of nearly 200 companies have pledged their shares. Out of this,25-30 are believed to be in trouble as they are unable to raise the required funds to meet the shortfall following the market crash.