LIC will never go Public & Essar Oil wants to go Private ! ~ What is the Connection !?

LIC will never go Public & Essar Oil wants to go Private ! ~ What is the Connection !?

Corporate Governance….rather the lack of it !

In January 2010 LIC picked up a huge Equity Stake in Essar Oil from Matterhorn in a NSE Deal

LIC picked up 2.21 cr shares or 1.83% Equity Stake in Essar Oil at Rs 140 in a Rs 309 cr Block Deal on NSE on January 22,2010

I had blogged on this LIC Deal too on January 25,2010

Shareholding Pattern reported by Essar Oil right from March 31, 2010 to the Exchanges does not show LIC as a Public Shareholder with a stake of 1% and above !

And is this how LIC ,apart from supporting the Government sell offs,goes about it’s Investments in Non Government listed companies too  and expends Rs 309 crs of our Premium Monies !!! ?

If LIC is privatised or comes out with an IPO  and yet remains a  Government Entity in substance if not in form,the standard of Corporate Governance will be challenged ferociously with Shareholders demanding more accountability,transparency and disclosures…rationale of such deals will then be a matter for open criticism,accusation,suspicion and debate

Will they let LIC ever go Public ! ? Nah ! Too many Skeletons !….I daresay it’s like  a Parking Lot…actually a Car Dump…or should I say Shares Dump !

….and LIC Chairman S K Roy reportedly has strongly conveyed to the Finance Minister why LIC should not be listed !

Have a Look !…the share Price of Essar Oil has never really again touched LIC Purchase Price of Rs 140  in the last four years and five months to date since their investment except for a brief few days in January & April of 2011  !…This is on BSE…Share Price is in Rs

Year

Open

High

Low

Close

2010

140.60

162.45

115.05

137.70

2011

138.50

147.80

45.10

50.10

2012

50.70

73.75

44.80

70.25

2013

70.95

96.15

46.05

54.50

2014

54.40

119.30

44.50

108.40

….The High of Rs 162 was reached earlier in the month than the LIC  Deal on January 22, 2010 and some price range stability and even marginal buoyancy was seen till mid 2011…and it’s been dropping since to a low of even Rs 44.50 this year in 2014….It closed the Month below or around Rs 50 in January to March 2014 this year…April 2014 saw a closing of Rs 60 before May 2014 took it away higher to Rs 90…It now is Rs 108.40 as on Friday June 20,2014

Strong Delisting Moves have obviously been known to Insiders from May 2014 and the Price has since moved past Rs 100 to close Friday at Rs 108.40 on BSE

Funny really…actually not so funny really !….that the Company responded just a month ago on May 21,2014 to a BSE query on whether there was substance to the ‘Essar Group Companies to Consider Delisting’ Coverage that a Stock Channel had broadcast….The Company clarified to BSE  that they had not received any communication/proposal from the promoters of their intention to delist   …..why could not BSE & NSE have followed up or drafted the query to cover all delisting awareness angles !? Of course they had not received this…it came later (see below)…but surely they knew !….how else did the Stock Channel know !? read more