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Just in time for Diwali, a home-grown entrepreneur has joined the ranks of Bill Gates, Warren Buffett and Shiv Nadar by setting a benchmark for corporate philanthropy with a ‘bonus’ gift of shares worth ₹20 crore to his colleagues, personal staff and close relatives.
Capital First Founder and Chairman Vaidyanathan Vembu’s generous gesture has nothing to do with the festival, but is rather intended as a token of his appreciation of the contributions of select people to his company’s growth. It comes at a time when the financial services provider is about to be merged with IDFC Bank.
A token of gratitude
“As a token of his gratitude to those who brought us here, Vaidyanathan has expressed his desire to transfer part of his personal holdings to the said colleagues,” said a company statement to the exchanges.
The 4.29 lakh shares that Vaidyanathan gifted are worth ₹20 crore (at the current market price of ₹478.60 on the BSE). Of these, 11,000 shares each go to 23 of his colleagues and 3 former employees, and 6,500 shares each go to his five personal staff, including driver and house maid staff.
In addition, 1.10 lakh shares go to his close family members and relatives. Vaidynathan clarified that none of the recipients are his heirs or successors. The beneficiaries, however, have to pay tax on their bonanza.
Prior to the gift, Vaidyanathan directly held 40.4 lakh shares, or 4.08 per cent in the company. His direct holding will now come down to 36.11 lakh shares; he also holds 4.94 lakh shares as the Trustee of Rukmani Social Welfare Trust in the company.
Quoting Vaidyanathan, the company statement to the exchanges noted that in the early days of Capital First in 2010, it had access to neither debt nor equity. In 2012-13, the economic environment in India was “disturbed”, and interest rates were rising, and it was difficult to build a nascent business, it noted. “Under such circumstances, people joined him, leaving well-paying jobs, worked hard, conceptualised strategies, introduced many innovations and discovered new lines of business,” the statement added.
Among the colleagues listed as giftees are three persons who are no longer in the organisation, “but their contribution cannot be forgotten,” Vaidyanathan said.
Merger with IDFC Bank
As part of Capital First’s merger with IDFC Bank, the bank will issue 139 shares for every 10 shares of the financial services provider.
Rajiv Lall, Managing Director and CEO of IDFC Bank, will take over as Non-Executive Chairman of the merged entity, and Vaidyanathan will become its MD and CEO.
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