With Mahindras joining Gesco, Dalmias may pull out
Mumbai: The search for a white knight is over. The Sheth-family, which has been under pressure ever since the Delhi-based, Dalmia-family controlled, Renaissance Estates, mounted a hostile takeover bid on Gesco Corporation, has finally reached an agreement with the Mahindra group to act as a white knight.

In a late night agreement signed between the two groups, the Mahindra group company, Mahindra Realty and Infrastructure Developers, has agreed to partner Gesco in making a counter offer for the full 45 per cent that the Dalmia-family has bid for.

The price of the counter offer is to be decided on Tuesday, after Sebi clearance is received. Once the counter offer is made, the Dalmia company, if they so choose, will have the option to withdraw the open offer within 14 days of the Sheth-Mahindra announcement.

Under the agreement reached between the Mahindras and the Sheths, after the counter-offer, the stakeholding of the two promoters will be shared in the 3:2 ratio, with the Mahindras’ holding being higher. However, the daily operations of the company will remain with Sheth and his team. This ratio will also be reflected in the constitution of the board of Gesco, which will be reconstituted soon.

The deal was brought together by HDFC chairman Deepak Parekh, who suggested it to the Mahindras at the instance of the Sheths. HDFC has extended a one-year line of credit to Mahindra Realty for funding part acquisition of Gesco shares.

Reacting to the development, while the Dalmia group stated that they would continue to fight based on the resources they had, they would do so only if the deal made any economic sense.
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BSE moves towards greater transparency
Mumbai: In a great step towards transparency, the Bombay Stock Exchange has introduced client identification code on its broker terminals that will, now, lift the veil surrounding brokers’ clients and makes identification of predators and circular-traders on the bourses much easy.

Besides, the new system makes pinpointing of price manipulators easier, and will also help break the nexus between clients and brokers. It also facilitates the Income-Tax department to assess the shares transactions and the gains and losses made thereon more accurately. The National Stock Exchange is also expected to introduce the identification system shortly.

The stock exchange has already made the necessary changes in the software and has asked its brokers to fall in line.
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