The Hindu : Business : Plea for fair deal to Global Trust shareholders

Online edition of India's National Newspaper
Wednesday, Jul 28, 2004

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Business

Plea for fair deal to Global Trust shareholders

By P. Vikram Reddy

HYDERABAD, JULY 27. The shareholders meeting proposed to be held by the founder-promoter of Global Trust Bank (GTB), Ramesh Gelli, here on Tuesday did not materialise. While Mr. Gelli was not available for comment, it is understood that the proposed meeting has been kept pending. The shareholders meet assumes significance in the light of the regulatory authority's notification that there would not be any swap of GTB shares for Oriental Bank of Commerce (OBC), with which it is proposed to be merged. Mr. Gelli has ruled out legal options, as the regulatory authority is well within its rights.

One option the core promoters seem to be banking on is the `franchise value' of GTB brand. One strategy could be to angle for some benefits on this count. Mr. Gelli himself has been quoted as saying that he would appeal to OBC to consider the franchise value of GTB, so that shareholders get something. Mr. Sudhakar Gande, Managing Director of GTB, also observed that the Reserve Bank of India's timely action helped preserve the franchise value.

The bank has about 1.6 lakh investors, including small shareholders. Mr. Ramesh Gelli, the founder-promoter and his associates account for about 19.53 per cent, with Mr. Gelli's family alone holding around 10 per cent. Public holding is quite large at 51.28 per cent.

Interestingly, the International Finance Corporation (IFC) reduced its stake from well over 10 per cent to less than one per cent over the past few years.

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