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OUR CORPORATE BUREAU
NEW DELHI, Sept 10: The shareholders of NIIT have forced the promoters of the company to withdraw a resolution seeking to hike the ceiling on investments by foreign institutional investors from from 24 to 30 per cent at its extraordinary general meeting in New Delhi on Thursday. Agitated shareholders, including many employees, argued that there was no need to allow FIIs to increase their stake in the company when the scrip price had dropped to Rs 1400-1450 compared with the 52-week high of Rs 1764.
After the shareholders opposed the resolution, the board of directors decided not to put it to vote. The shareholders were of the opinion that if the purpose of raising the FII stake was to get retail investors the benefit of global pricing for NIIT shares, then the prevailing conditions did not justify it. Considering the depressed market conditions prevailing now, the shareholders felt the issue could be taken up at an appropriate time later.
Denying that the proposal had been spiked, NIIT vice-presidentSanjiv Kataria said that in the interest of the emotionally-charged shareholder sentiment, the board had decided to wait for a more opportune time before giving a nod to the FIIs to raise their stake. ``It was simply decided to consider the proposal again at a later stage when the stock market picks up,'' Kataria added.
At the EGM, chairman Shiv Nadar admitted that the share prices had fallen since the notice for the meeting was sent to the shareholders 25 days ago. He also announced that he would approach them again with the proposal when the stock price improves. According to Kataria, the unanimous decision by the NIIT board to defer the proposal had set a new example in corporate governance. The EGM also unanimously voted in favour of Rajendra S Pawar's continuation as the managing director. Nadar announced that Pawar had been invited by the Geneva-based World Economic Forum to serve on the advisory committee of the global growth companies. Pawar would be the first Asian industry leader to be on theadvisory council of the global growth companies of the Forum. NIIT's net profit has increased by 92 per cent to Rs 45.3 croe in the nine-month period ended June 30, 1998 compared to Rs 23.6 crore in the corresponding period of the previous year. NIIT's operations in the third quarter resulted in revenues increasing by Rs 120.7 crore from Rs 84.9 crore.
In the nine-months, software business recorded a growth of 8 per cent to Rs 212.9 crore, training business grew by 59 per cent to Rs 176.6 crore.
Multimedia business grew at the rate of 88 per cent to reach Rs 79.5 crore. Software business has a share of 62 per cent in the total revenue, while training contributes 38 per cent.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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