Bses, Fis Not To Oppose Reliance

Reliance Industries' attempt to take management control of BSES Ltd is unlikely to hit any roadblocks.

The BSES board, at an emergency meeting on May 20, following Reliance's 20 per cent unsolicited open offer, decided that there was "no reason to panic, and the company should take the development in its stride".

The three institutional nominees on the board from General Insurance Corporation, Life Insurance Corporation and Unit Trust of India also supported the BSES board's decision.

"We have decided to adopt a wait-and-watch policy. Anyway, the formal open offer is due only in June," UTI chairman P S Subramaniyam said.

 

Indications are that the institutions are likely to wait for a few more days to see if there was any counter-offer, as some senior officials feel that the "Reliance offer was not attractive". Subramaniyam said, "Any decision of the institutions will be driven only by commercial considerations."

The institutions have a 35 per cent stake in BSES against Reliance's 14.82 per cent. And the company's floating stock is only around 13 per cent.

Reliance will have to secure the full support of the institutions if it is to bring about a change in management and take over day-to-day management of the company.

BSES chairman and managing director R V Shahi said: "There is no question of opposing the open offer. Reliance made the offer in accordance with Sebi guidelines. This is being done in an entirely transparent manner."

Shahi said the fact that the Reliance Group had hiked its stake to close to 15 per cent trigger-point from around 10 per cent earlier was an indication that it was interested in the company. He added that neither he nor any of the other members of the board will have any difficulty if Reliance takes over the company. "Earlier, all major decisions were taken in consultation with the financial institutions. If Reliance were to succeed in this open offer, we will have to take all decisions in consultation with them. The board has taken a very matured view," Shahi added.