Tata Metaliks' minority shareholders vote on merger resolution

The move comes after the shareholders had approached the Calcutta HC demanding a stay of the court convened meeting slated for today

Minority shareholders of Tata Metaliks today voted on the resolution of the company to merge itself with Tata Steel.

The move comes after some minority shareholders of Tata Metaliks had approached the Calcutta High Court demanding a stay of the court convened meeting of the shareholders slated for today and quashing the scheme laid out for merging Tata Metaliks and its subsidiary Tata Metaliks Kubota Pipes with Tata Steel. The court did not put a stay on today's meeting but directed Tata Metaliks to take separate voting of public shareholders and promoters.

Today's voting results will be reported to the court.

According to one of the minority shareholders, the swap ratio of 4:29 was against the interest of shareholders and should be revised if the merger, if at all, had to go through. Some other minority shareholders had similar views as well. According to the rules, in a postal ballot, a simple majority of minority shareholders will ensure passage of a resolution. The company's non-promoter holding is 49.91%. Tata Steel and its subsidiary hold around 50 per cent in Tata Metaliks. Tata Steel and its subsidiary hold around 50% in Tata Metaliks.

"The scheme should be quashed as this is not a good law and doesn't give all minority shareholders to cast their vote over the resolution. The directive from Sebi clearly mentions that views of minority shareholders would have to be taken and that too through e-voting or postal ballot. As a consequence everyone would get the chance to participate and cast the vote," one of the shareholders of Tata Metaliks said who is involved with the application made in front of the court over the merger issue.

Tata Metaliks' chairman, Koushik Chatterjee, had said in the past that the merger was in the interest of shareholders, as the company's sustainability was a main objective. "Given the oligopolistic nature of the raw material industry, captive sources of raw material had become critical for any company," he had said on the day of company's annual general meeting. The pig iron industry is highly raw material-intensive and the industry was getting impacted because of a partial ban on iron ore mining and a weak rupee increasing the cost of imported coal/coke.

Shares of Tata Metaliks ended 2.39% higher at Rs 49.20 on the BSE today amidst strong opposition from a section of minority shareholders on the resolution of merging the company with Tata Steel. Shares of Tata Steel also were trading 1.03% higher at Rs 366.70 on BSE on Monday.