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Promoters of various companies have been known to pamper themselves by allotting preferential shares at prices significantly lower than prevailing market prices. With equity markets enjoying a solid run, greedy promoters seek to make a killing by allotting shares of the company to themselves at a steep discount, while selling existing holdings at an enormous profit.
Goyal Financials India flouts SEBI takeover norms by selling stake internally; the company has failed to submit notices and annual reports to members since 2005
The management of a little-known company, Goyal Financials India Ltd, apparently changed hands in 2008, with promoter and previous managing director Arun Goyal selling his stake in the company to present managing director Sanjay Savani. This act has been carried out without complying with SEBI takeover regulations and without providing any exit opportunity for other shareholders.
Trading in the company’s scrip on the BSE has been suspended since 2001.
The company, now rechristened as M/s GFL Financials (India) Ltd, has not sent annual reports or notices of any general body meetings to its shareholders since 2005. The company auditor, Mehul and Associates, has been turning a blind eye to the deplorable standards of corporate governance maintained by the company.
It has effectively given false certificate of corporate governance for the past three years. To top it all, the company’s 2007 annual report was signed by an individual as director of the firm, when actually she had resigned from the post much earlier.
The new management has also passed void resolutions to shift the registered office of the company from Madhya Pradesh to Daman without giving notice of EGM held on 15 May 2009. Apparently, the result of a postal ballot filed with the BSE and Registrar for shifting the office is also a doctored one.
A complaint has been filed with SEBI seeking its intervention and investigation into the company’s affairs. — Sanket Dhanorkar