Mumbai, Oct 23: The Bombay Dyeing-Bajoria battle, where the company got to know of the acquisition of shares over the 5 per cent limit quite by chance following a download from the depository, has spawned a fresh round of the battle of the depositories.Quick to see a business opportunity in the controversy, Central Depository Services (India) Ltd, the country's second depository, has got into the act and launched an aggressive marketing pitch before mega corporates, placing itself as the answer to corporates who wanted to guard themselves against such predators by updating themselves regularly on their shareholding pattern. The National Securities Depository Ltd (NSDL), the country's first, is the depository for Bombay Dyeing.
CDS has written to all "A" group companies, telling them how it can help them get rid of their nightmares. CDS chairman and managing director MG Damani told The Financial Express that his depository would also write similar letters to those companies which were in NSE's Automated Lending and Borrowing Mechanism (ALBM) list, but were outside the A group.
Pointing to the fact that Bombay Dyeing did not get the information on time, the CDS letter says:"In this era of information technology, it was astonishing to learn that a critical information such as the holding pattern of the shareholders was not available to the company on tap."
Making it clear that CDS is equipped with systems which can eliminate such "avoidable circumstances", the letter says that with its unique centralised database design, the companies can have the most up-to-date information of their shareholdings every 24 hours to know the changes in the holdings so as to be on alert. "In short, our technology permits a company, if it so chooses, to have an updated shareholder list every 24 hours."
However, countering the CDS view, NSDL officials say that NSDL gives weekly information to companies, but gets daily information at its centralised database. "We give weekly information, but we do get daily data on our centralised system", Mr VR Narasimhan, senior vice-president, NSDL, told The Financial Express.
Sources in NSDL, however, also say that whether the depository will give daily updates to companies or not is a "policy issue" and there is no decision on it. "Why don't you ask the company concerned (Bombay Dyeing) whether they got what they wanted or not", a senior NSDL official said.But presenting itself as a promoter's choice depository, CDS says the other factors which are expected to weigh in with the promoters in their choice for CDS is:
no custody or holding charge is payable to CDS
competitive transaction cost
direct investor to investor level transfer; and
online information available to depository participants, enhancing the quality of service to investors.CDS has also provided the companies with settlement volume figures to buttress its point that it is a growing depository. It has also urged the companies to dematerialise and hold the promoter holdings of the companies through CDS, to avail of the "superior information system" that CDS claims to offer. The depository has also urged corporates to write to their shareholders to urge them to dematerialise their shares through CDS which would help the companies to monitor such critical information.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.