FIPB spikes Udayan Bose move to sell 51% in Merwanjee Forex

Friday, July 11 1997

FIPB spikes Udayan Bose move to sell 51% in Merwanjee Forex

Veeshal Bakshi & Saibal Roy Chowdhury

New Delhi, July 10: The Foreign Investment Promotion Board has rejected Udayan Bose's proposal to sell 51 per cent stake in Merwanjee Forex Pvt Ltd to the Dutch company, UN Holdings BV.

The decision could deepen Bose's financial problems, sources said.Bose had struck a deal with UN Holdings to divest his 51 per cent equity stake comprising 10.20 lakh shares in Merwanjee Forex at a price of Rs 15 per share. Bose would have raised Rs 1.53 crore from the deal.

Bose could not be contacted for comments as he is away in the US. However, his spokesman said the company would submit a revised proposal before the Foreign Investment Promotion Board.

The Foreign Investment Promotion board decision follows opposition by the finance ministry on the grounds that forex broking business was not one of the 14 approved business activities that non banking finance companies in which foreign equity is held, could take up.

Bose has been restructuring his group in order to get out of unremunerative businesses and improve his financial position.

He has been trying to dispose of his broking firm, Merwanjee Securities, which has a BSE membership.

There were reports that Bose made a deal for this company with UBS Securities. However, the deal fell through at the last moment due to some differences between both sides.

Since then, Bose has been on the lookout for a buyer for the broking company but has not been able to fetch a decent price due to a slump in the stock market. At the same time, the broking firm is not generating sufficient revenue for him.

His close sources said he has also been on the lookout for a buyer for AMC, which manages a couple of mutual fund schemes such as Taurus Genshare and Taurus Newshare.

Bose sold his venture capital company, Creditcapital Venture Fund (CVF), to Infrastructure Leasing & Finance Company (IL&FS) last year. At the last annual general meeting of Credit Capital Venture Fund, the management pushed through a proposal for transferring the registered office of this company.