The Hindu Business Line : Coke issues non-voting equity shares to Indian holders

AMERICAN soft drink multinational Coca-Cola has issued non-voting equity shares of its Indian bottling subsidiary — Hindustan Coca-Cola Beverages Pvt Ltd (HCCBPL) — to its Indian shareholders, according to highly-placed sources in the banking industry.

The company's application for denying voting rights to Indian shareholders is currently pending with the Foreign Investment Promotion Board (FIPB).

A company spokesperson declined to clarify on the subject of shares being issued to resident Indian shareholders bearing voting rights or not. However, the company feels that the very idea of granting voting rights in the company to the Indians is "substantive and onerous", according to company Director, Mr Joel A. Peres.

The FIPB, at its last meeting, deferred a decision on the issue. It is scheduled to meet again on Thursday and the issue related to Coca-Cola will be taken up.

It seems a section of officials in the Industry Ministry is favourably inclined towards Coke. However, it remains to be seen what stand the Department of Economic Affairs (DEA) takes on the issue, because FIPB no more comes under the administrative purview of the Industry Ministry but under the administrative control of the DEA.

According to DEA sources, however, "There were no differential voting rights on equity shares when the condition of divesting equity in favour of Indian shareholders was imposed."

A senior Government official said the normal practice followed by the Government is to go by the legal provisions that were applicable on the date of the agreement. In this case, the official said, since in 1996-97 all equities mandatorily had voting rights, it would be normal that Indians too will get voting rights.

However, one cannot rule out the possibility that the Government may succumb to pressure, depending on who is trying to pressurise, the officials maintained.

But the company's move does raise doubts on whether it is indifferent to the Government's decision on the issue of voting rights.

Article E-Mail :: Comment :: Syndication

Stories in this Section
Chhabria daughter could queer pitch

HLL special dividend cut by Re 1

Reliance gas find flares Dabhol lenders

PIB clears SCI tanker purchase plan

Cool, man? IT is the woman...

Private bank FDI cap only at 74 pc

Coke issues non-voting equity shares to Indian holders

Multiple registration, SMS facility — TRAI clears line for Reliance, Tatas