Compulsory Back Back of Shares- Violates Fundamental Right to Equality

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Regarding the moves , earlier of Cadbury India Limited , others and , latest, by Piramal Glass :-

Compulsory Buy Back of Shares ( selectively from minority Non promoter Share holders ) is violative  of Fundamental Right of Equality enshrined in the Constitution of India

Such a move creates two separate and unequal classes of Shareholders , i.e. Promoter Share Holders and Non Promoter Share Holders .

Please read this very informative Post :-

http://www.legalservicesindia.com/article/article/squeeze-out-of-minority-shareholders-1503-1.html

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This is a very dangerous trend and Investors must unite and fight against these compulsory  selective.extinguishing  of Non Promoters ' shares .

Only those companies whose Promoters feel that future prospects are very bright go in for compulsory buy back.

No company with  a dark future goes in for Buy Back.Then they let the shares  remain with Non Promoters.
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Investment in shares is like the playing cards game of Flash " Teen Patti " . Promoters have seen their cards. Non Promoter / Public Shareholders are Playing "BLIND "

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Acquisition rates are arbitrary as so called valuers are partial and do only the bidding of the Promoters.

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OPPOSE ALL COMPULSORY BUY BACK OF SHARES

Delisting may be OK .

 But forced cancellation of Minority shares is not done even in Capitalism

Capitalism means Demand and Supply.

If the Majority wants the Minority 's shares then , to Quote from Mario Puzo 's Godfather " 

" They should make an offer we cannot refuse "

. Let them approach us and buy at a mutually agreeable price but not at a Dictated Price.

Free will transactions are the essence of Capitalism .

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Piramal Glass Kicks Out Loyal Remainder Public Shareholders

Piramal Glass ( earlier named Gujarat Glass )is the latest  to follow the example of Cadbury India, in compulsorily buying back the shares of Non Promoter remaining Loyal shareholders .

The payment made is @ Rs. 275 Share

In this case no High Court Order has been taken but " confirmation " by National Company Law Tribunal ( NCLT , Mumbai )

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old post

January 18, 2011

Cadbury India Limited

We salute all those share holders of Cadbury India who are steadfastly giving their time and money in pursuing the High Court case against compulsory acquisition of shares from remaining minority share holders.

There are around 8,159 remaining non promoter shareholders who together own 2.42% stake in Cadbury India.

We strongly feel that Government of India and SEBI should amend the laws so that Companies using their " brute majority " are not able to " compulsorily " buy out minority shareholders at what they perceive to be the " fair value " . Delisting may be OK . But a High Court Order for selective share reduction ( of Non Promoter Share holders ) is a different matter altogether.

 1 ) If a company wishes to buy back compulsorily then in the voting procedure the majority holder ( promoter ) should be debarred from voting . Only the small share holders should have the Right to vote on that particular Resolution .

2 ) As in the case of land acquisition , the Company should state valid reasons for acquisition of remaining shares ( In Cadbury 's case the remaining 2 odd  % share holders can , frankly , in no way alter  the Company 's policies.)  Only a few more Annual Reports are to be despatched and a few more chairs at the AGM .  ( Cadbury India Limited 's shares were delisted w.e.f  20-01-2003 )

3 ) There should be a soletium  ( a premium over and above the fair value to compensate for compulsory buy out ) of 50 %

If the Company feels that the rate it is offering is " FAIR " then it should , also , be willing to offer to sell its entire majority  holding at that rate . The minority share holders ( and other Indian share holders ) should have a Right of Pre emption at that " FAIR " rate. For example if Cadbury India Limited feels that Rs.2000 is a " fair rate " then Indian shareholders in general should be given an opportunity to form a SPV ( Special Purpose Vehicle ) Company which ( with suitable debt equity Leveraged Buy out ) and buy  at the same rate  the majority shares from the Promoters. A period of 6 months should be kept for giving this opportunity to Non Promoter Indian shareholders

However , we  sincerely wish that Cadbury India Limited offers its remaining loyal share holders " Kuchh Meetha " and in New Year 's " Shubh Arambh " withdraws this move.
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For Shakti Met-Dor , please click :-

http://www.rareindianshares.info/2013/05/shakti-met-dor-compulsory-acquisition.html

--------------------Regarding Compulsory Cancellation of Shares Moves  by

Cadbury India Limited 

Shakti Met-Dor Limited  ((subsidiary of German giant Hormann Beteilgungs Gmbh )

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http://www.rareindianshares.info/2013/05/corruption-is-there-in-indian-corporate.htmlhttp://www.suchetadalal.com/?id=175202d7-a5ce-be2f-492fe1477460&base=sub_sections_content&f&t=Essar%27s+Delisted+Saga

 http://www.business-standard.com/india/news/cadbury-raises-buyback-price/421719/

 http://www.moneycontrol.com/news/business/why-didn39t-you-give-fin-projections-to-ey-hc-asks-cadbury_562074.html

http://seekingalpha.com/news-article/1520805-cadbury-kraft-india-one-of-fastest-growing-operations-for-kraft-globally

http://rareindianshares.blogspot.com/2011/01/cadbury-quit-india.html

http://www.gauravblog.com/?p=1277

http://www.kraftfoodscompany.com/in/en/Brands/index.aspx

http://www.rareindianshares.info/2012/07/ecellent.html

http://altaisadvisors.com/blog/2012/07/08/cadbury-india/comment-page-1/#comment-1517

http://www.rareindianshares.info/2012/11/cadbury-india-or-mondelez-international.html
http://economictimes.indiatimes.com/personal-finance/savings-centre/analysis/small-equity-investor-how-to-safeguard-your-interests/articleshow/21742266.cms?curpg=3

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HUM MEHNAT KASH ISS DUNIYA SE

JAB APNA HISSA MANGEY GEY

IK BAGH NAHI; IKK KHET NAHIN

HUM SAARI DUNIYA MANGEY GEY

( Josh Malihabadi )

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Saadda Haq , Ethey Rakh