Mesco Offers Jobs To Bond Investors

Mideast Integrated Steels Ltd of Rita Singh-promoted Mesco Group is offering `unique' employment incentives for those who subscribe to its Secured Armed Forces Steel Bonds. According to legal experts, the incentives may not be strictly in keeping with the spirit of the law.

In what is seen by legal experts as a trap for unsuspecting investors, the company is guaranteeing jobs to the investor, or his/her son or daughter provided they have certain qualifications and subscribe to a certain amount of the secured redeemable 18 per cent non-convertible/optionally-convertible debentures of face value Rs 100 each.

As another option, Mideast Integrated Steels _ which is setting up an integrated steel plant in Orissa _ also guarantees that it will set up ancillary units like auto repair shop, electric repair shop, instrument shop, entertainment shop, department store, medical store, restaurants and canteen

 

O P Vaish, noted corporate lawyer and president of the PHD Chamber of Commerce & Industry, said: "We will have to look into the workings of the regulation. But on the face of it, these incentives are not the done thing since they side-track the main aspects of the issue. The investors should look at the basic strength of the issue and the record of the company."

Delhi Stock Exchange executive-director S S Sodhi said the company had not yet applied for a listing. "However, the application will be addressed keeping in view all aspects of the case and the fact that the company has a dismal track record of dividend payment and investor servicing."

For an investment up to Rs 2 lakh, the company guarantees a job to the investor or his/her son or daughter who should be a qualified MBA.

For an investment up to Rs 1.5 lakh, a job is guaranteed to the investor or his/her son or daughter who should be a qualified graduate engineer. For an investment up to Rs 1 lakh, a job is guaranteed to the investor or his/her son or daughter who should hold a diploma in engineering.

The option of setting up an ancillary unit is also available to investors who invest up to Rs 1 lakh.