SJM seeks PM's intervention in keeping ITC in Indian hands

The RSS-affiliated Swadeshi Jagran Manch (SJM) on Tuesday sought Prime Minister Narendra Modi's intervention to ensure that the controlling stake in multi-business conglomerate ITC does not go to a foreign company.

The SJM wrote to Modi in the wake of reports of a possible takeover of ITC by British American Tobacco Company (BAT), a UK-based multi-national firm.

"Swadeshi Jagran Manch requests you to kindly intervene in this case in national interest, and pass instructions to increase the shareholding of the government to thwart the possibility of a takeover of an Indian company (ITC) by an MNC," its co-convener Ashwani Mahajan said in the letter to Modi.

BAT already holds stake in the ITC, which has diversified business in a range of sectors including FMCG, apparel, hotels, specialty papers, packaging, agri-business and information technology among others.

Referring to ITC's shareholding pattern, he said shares held by domestic financial institutions used to be 32 per cent which has come down to 30.4 per cent.

BAT's stake is at 29.60 per cent in the company.

As a consequence of the share sales management by agencies, the shareholding of public sector financial institutions and the government of India in ITC has come down significantly, narrowing the gap between the shareholding of the government of India and its institutions and BAT, Mahajan said.

"This has increased the risk of the possible takeover of management by the foreign company BAT, by virtue of the fact that BAT would become the dominant shareholder and the company will go into the hands of foreign management, and for all practical purposes, become a foreign company, which at present is an Indian company with an Indian soul," Mahajan claimed in the letter.

The SJM said its fear increased when recently BAT did not agree to support ITC's board approved resolution to give a stock option scheme to employees of ITC, which would be linked to the company's performance at the stock exchange.