The Managing Director of L&T Metro Rail Hyderabad Ltd, Mr V.B. Gagdil, has handed over a special “Golden Share” of the company to the Andhra Pradesh Chief Secretary, Mr Pankaj Dwivedi.

L&TMRHL is a special purpose vehicle company established by L&T to execute the Rs 14,132-crore Hyderabad Metro Rail project.

Golden Share is a non-transferable special equity share with a face value of Rs 10 but gives powers to the State as if the Government holds 26 per cent shares in the SPV, without investing that amount.

The authorised equity capital of L&T Metro Rail Hyderabad is at present Rs 2,439 crore and its paid-up capital is Rs 344 crore. Financial closure has been achieved by L&T for the Rs 14,132-crore metro rail project per se and Rs 2,243 crore for the real estate component.

The Golden Share entitles the Government to nominate one director on the board of L&TMRHL and he will have veto powers on important matters as per the concession agreement.

Thus, it ensures that the Government has a say in all major decisions taken by the private concessionaire company. It also ensures that the Government’s rights are irrevocable and are not adversely affected in any manner.

Some of the special powers that accrue to the Government due to Golden Share include power to veto, to purchase the company’s own shares, reduce the company’s share capital among others.

As per the Indian Companies Act, only those shareholders who have more than 26 per cent of the equity share capital have the right to block resolutions in board meetings and these powers accrue to the Government with the Golden Share.

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