The Hindu Business Line : OBC decides to extinguish GTB shares on SEBI advice

SEE, I will be very honest. GTB (Global Trust Bank) has become history. This company doesn't exist anymore. So, the share certificate today is as good as a toilet paper." This is what Mr B.D. Narang, the then Chairman and Managing Director of Oriental Bank of Commerce (OBC), told Business Line on August 17 last year.

He was cautioning the investors not to risk their money by buying the shares of GTB since the amalgamation scheme of GTB with OBC did not provide for any swap ratio. The scheme announced by the Reserve Bank of India on August 14 last year said the GTB shareholders would be paid money, if any, only after a period of 12 years.

What Mr Narang said about the worth of GTB share certificates has now become exactly true. Following the advise of the Securities and Exchange Board of India, OBC has decided to extinguish the shares of GTB.

As per the RBI scheme, the entire amount of the paid-up capital and reserves of the erstwhile GTB (e-GTB) was treated as provision for bad and doubtful debts and depreciation in other assets of the bank. In terms of the scheme, the aggregate amount representing the value of the assets determined as readily realisable assets of e-GTB was credited to the Asset Account.

The scheme envisaged that the surplus amount, if any, after appropriating towards the liabilities of the e-GTB, should be distributed pro-rata amongst the shareholders of e-GTB after the expiry of 12 years from the prescribed date (August 14, 2004) or such earlier period as the Central Government may specify for this purpose. Accordingly, August 31 last year was fixed as the record date to determine the shareholders of e-GTB for this purpose.

Keeping this in view, SEBI had advised both the depositories (NSDL and CDSL) to freeze the ISIN (International Security Identification Number) of GTB after the above record date to ensure that no further transfers take place in the GTB stock, including off market transactions.

However, some shareholders holding shares in demat form were facing difficulty in closing the demat accounts since the ISIN of e-GTB was not extinguished. Considering the requests of various shareholders and the recommendation of the Depositories, the market regulator has advised OBC to extinguish the shares of erstwhile e-GTB and notify the same to the shareholders of e-GTB.

Following this, OBC has filed the corporate action form with the depositories for extinguishing the shares of e-GTB. While NSDL has approved extinguishing the e-GTB shares on December 6, CDSL did it on December 8.

As on March 31, 2004, the GTB paid-up equity stood at Rs 121.35 crore (12.13-crore shares of Rs 10 each). Of this, the promoters were holding 19.53 per cent, while the public holding stood at 51.28 per cent.

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