The Hindu Business Line : Uncertainty surrounds Devaki open offer

A MONTH after the open offer by a group of doctors aiming to take over Devaki Hospital closed, uncertainty surrounds the status of shares that were sold by the shareholders to the acquirers.

Indbank, the acquirer's (Madras Medical Care & Health Centre) merchant banker, said the open offer brought in 23.07 per cent of Devaki's equity. About seven per cent of the shares are in the form of physical certificates and their transfer has to be approved by Devaki's Management Committee. There is uncertainty about the transfer because Ms Chitra Chokalingam, the former Managing Director who is opposed to the takeover, is part of the committee.

Devaki's Managing Committee has three members: Ms Chokalingam, Dr A. Rathnasabapathy and Mr A.L. Somayaji, who was appointed by the Madras High Court. In July last, the hospital's Governing Board revoked Ms Chokalingam's powers as Managing Director. Subsequently, when the issue was taken to the court, the Managing Committee was formed.

Indbank officials said they had formally asked the committee to transfer the shares. However, people associated with the offer were unsure about the next step. One of them said, "Since the governing board has been superseded, whoever is in authority should do it."

SEBI regulations say a valid share application has to be transferred. Ms Chokalingam has questioned the legitimacy of the most important deal in the open offer, that of IDBI.

IDBI with a 13.25-per cent stake in the company holds the key to the success of the offer. Ms Chokalingam said IDBI's decision to sell was inappropriate because it was obliged to offer the promoters a chance to buy the 13.25 per cent stake.

Following the open offer announcement, Ms Chokalingam said IDBI's officials had made her an informal offer to sell the shares. At present, she added, "We have told IDBI to clarify matters." However, IDBI has issued a statement saying that the shares have been sold to the acquirers. With the IDBI sale, sources in Devaki said the acquirers controlled 34 per cent of the company as against Ms Chokalingam's control over 26 per cent.

Devaki officials said the management committee is likely to meet next week where a clearer picture would emerge.

More Stories on : Open Offers | Medical Institutions & Hospitals

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page