Mumbai, Aug 17: The Mumbai high court, in a decision dated July 31, 1997, has approved the request of Jindal Drugs to delist its equity shares from the Mumbai, Delhi, Ahmedabad and National stock exchanges. This is subsequent to the company's decision to reduce and extinguish its share capital by nearly 39 lakh shares.

The company has notified the Bombay Stock Exchange (BSE) about its decision to refund the entire amount received from the Indian public on account of share capital and share premium by way of the issue of 38.92 lakh equity shares as per the prospectus issued in August 1995. The company has decided to close the transfer books from September 16-18, 1997, for the repayment of funds. Following this, the BSE has advised member brokers not to deal in the securities of the company from Tuesday, August 19, until further notice.

The company had entered the capital market to part-finance its Rs 162 crore ascorbic acid (Vitamin C) project with its maiden issue, priced at Rs 175 per share (aggregating Rs 68.10 crore) on September 5, 1995. The issue was oversubscribed 1.4 times, and the allotments were completed in October, 1995. At the AGM held on July 29, 1996, the company decided to defer its project and also not seek the payment of call money which was due in August 1996. The board of directors has already filed an arbitration claim before the International Chamber of Commerce against its foreign technical collaborator Noy Vallesina Engineering SpA of Italy claiming a reimbursement of the expenditure incurred on the project.

The project had to be cancelled because certain plant specified by the technical collaborators substantially increased the cost of project over and above the specifications contracted earlier. Due to this the company stopped all payment to the technical collaborator after the downpayment of Rs 4.1 crore. However, the board has decided to refund to shareholders the amount paid by them on account of share capital and share premium, irrespective of the outcome of the litigation with the collaborators. Following this, the paidup equity will fall back to below Rs 12 crore-the same as before the public issue.

On the BSE, the equity shares of the company were last traded in June 1996 at a price of Rs 200.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.