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ACG Boston's DealMakers 2012 M&A Outlook Conference

 

ACG logo

The Association for Corporate Growth or ACG is the global community for middle market M&A dealmakers and corporate business community. The key takeaways from the DealMakers 2012 M&A Outlook Conference are summarized in this article.

 

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Mohandas Pai returns to shareholder activism

MUMBAI: Former Infosys director T V Mohandas Pai has returned to what he does best-promoting shareholder activism. Pai, now chairman of Manipal Universal Learning, has acquired a significant minority stake in InGovern Research Services, a proxy advisory services company, which helps institutional investors tackle corporate governance issues at listed companies. It was Pai's hard-hitting questions at Infosys shareholder meetings that drew the attention of the company's co-founders N R Narayana Murthy and Nandan Nilekani, who later invited him to join the management. Pai rose through the ranks becoming HR director before quitting the IT bellweather last year. His investment in...
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Protecting minority interests not an easy task in India

For a shareholder to initiate a direct action, rather than indirectly on behalf of the company, it needs to be supported by at least 100 shareholders or such number of shareholders holding 10% of the company. Instances of shareholder activism in India have been few and far between. Now, an activist London-based hedge fund has gone for the jugular, charging the board of a public sector company of a breach of fiduciary duties, by not acting independently of the Indian government on several matters including pricing. The Children’s Investment Fund Management (UK) LLP (TCI) has written to the board members of...
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Did LIC break any Sebi norms in its purchase of ONGC?

Let’s say you are one of India’s biggest business promoters. You know your company is planning to make an additional offering of shares a few weeks down the line, but the market is tepid. In order to get a good price, you ask a group company to start bidding up your shares in the market so that the IPO will fetch a better price. Which rogue promoter is that? But this is exactly what the Life Insurance Corporation (LIC) has done before the government’s offer for sale of ONGC shares (a.k.a. auction) which ended in a controversy last week. According to...
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DLF inflated asset base via dealings with DAL: Veritas

A report from investment bank Veritas Investment Research on DLF saw the stock tanking 5.17% in trade yesterday. The report alleges that the debt-laden property developer has been cooking its books for the last four years with large amounts of financial misreporting. In an interview to CNBC-TV18, Neeraj Monga, the author of the report hammers DLF saying he doesn't buy the realtor's accounts. In his report titled 'A Crumbling Edifice', he raises doubts about the company's disclosed book equity and asset base. You may read: Veritas aims gun at DLF; says co may have to recast loans The Veritas report alleges DLF inflated sales...
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Are preferential issues abused by promoters? Experts debate

Institutional Investor Advisory Services' (IIAS) advice to shareholders of Hindalco to vote against its preferential issue of warrants has sparked off a debate about the viability of preferential allotments. According to Amit Tandon, managing director of IIAS, shareholders should vote against preferential issue of warrants by any company because it is an instrument which is abused by promoters. "We have looked at about 20-25 companies and we find that whenever the warrant conversion price is higher than the market price of the share, the warrants don't get converted and vice-versa," he said. Therefore, he recommends a rights issue over any preferential allotment. Tandon...
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Minority shareholders oppose Akzo Nobel merger move

KOLKATA, FEB. 8:      Shareholders of Akzo Nobel India Ltd have approved a proposal for merger of three unlisted group entities with it, the company said on Wednesday. However, 23.15 per cent of the valid votes of 28.99 million, polled on Tuesday at a court-convened shareholder meeting here, were against the resolution. A large chunk of minority shareholders opposed the move on the premise that the proposed merger did not protect their interest. Mr Shriram Subramanian, MD of Bangalore-based InGovern Research Services, a proxy advisory firm assisting institutional investors, told Business Line that as a consequence of the amalgamation, promoters will increase...
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Sebi lens on Patni delisting sans iGate reducing stake below 75%

MUMBAI: The capital market regulator is inquiring if technology outsourcer Patni Computer Systems can delist without lowering promoter stake to 75% as mandated by law.The move follows complaints by some shareholders in Patni alleging that US-based software maker iGate has violated norms by announcing delisting of the Indian company without first paring its stake from 83% to 75%."The regulator is looking into it after some shareholders complained," said a person familiar with the matter.In a public announcement on January 11, 2011, iGate had said it will delist Patni shares, after completion of the open offer, under the Sebi (Delisting of Equity Shares) Regulations 2009. But Sebi objected to...
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Shareholder group wants Vaswani Industries promoters out

MUMBAI: A battle is brewing between promoters of Raipur-based Vaswani Industries and its public shareholders. A bunch of Vaswani's shareholders, owning around 11% stake in the company, have called for an extraordinary general meeting on January 23 to remove the founders from its board. Promoters own roughly 52% in the company. The shareholders include MGF Growth Research & Investment, Decent Financial Services, Meenaben Shah, Padmaben Shah and Rajendra Jain, who have sought the removal of Ravi Vaswani, the managing director and the founder of the company, and appointment of their representative Jayshree Gangurde in his place. They will also demand the replacement of Pramod Vaswani, whole-time director...
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AkzoNobel's shareholders oppose move to hike foreign promoter stake

MUMBAI: A group of minority shareholders of AkzoNobel, including Asian Paints, have objected to a proposal under which the listed firm will absorb three unlisted group companies at a higher valuation, thereby increasing foreign promoter's share holding. In a concerted move, the institutional investors such as ICICI Prudential, LIC, SBI Mutual Fund, Bajaj Allianz, among others, have informed AkzoNobel, (formerly ICI) about their discomfort over the valuation given to the three companies controlled by Akzo's foreign parent, though the listed firm has a market cap of over 2,000 crore and cash in hand of about 1,000 crore. Asian Paints, whose founders fought...
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Sharp rise and fall in share price of Kwality Dairy India; Brokers see foul play

MUMBAI: A penny stock that gained 132 times in less than 18 months is back in news, but for the wrong reasons. The sharp rise and the subsequent fall in the share price of dairy and food processing company Kwality Dairy India (KDIL) has raised eyebrows, with market participants suspecting foul play in the counter. Even though there were no corporate announcements that could have adversely impacted the stock, the share price fell almost continuously, after touching a high of Rs 189 in October. From around Rs 1.50 (after adjustments to corporate actions) in October 2008, the stock rose to over Rs...
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Prominent Indian entrepreneur in the financial services industry shares his journey to the top

Ramdeo Agarwal
Mr. Ramdeo Agarwal is the Managing Director of Motilal Oswal Financial Services. He is a reputed stock picker and is one of the most successful Indian entrepreneurs in the financial services industry.
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Satyam: Rs 7,000 cr fraud, and Rs 5 lakh fine for auditors?

Can the penalty for aiding and abetting a Rs 7,000-and-odd crore fraud be just Rs 5 lakh and a debarment? That, incidentally, is what the Institute of Chartered Accountants of India – ICAI, the audit profession’s self-regulatory body  â€“ has fined C Ravindranath and P Sivaprasad, employees of Lovelock & Lewes, an affiliate of Price Waterhouse India, for their role in the Satyam Computer Services fraud perpetrated in cahoots with the promoter, B.Ramalinga Raju. ICAI has debarred them from practising as chartered accountants by removing their names from the institute’s register. A BusinessLine report quotes ICAI President G Ramaswamy as saying: “We are proactive in taking action...
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Arnault, Colony Said Weighing Replacing Carrefour CEO Olofsson

Carrefour SA (CA)’s largest shareholders are considering replacing its chairman and chief executive officer, Lars Olofsson, people familiar with the matter said. Groupe Arnault SAS and Colony Capital LLC, which hold a combined 16.15 percent of Carrefour and 22.14 percent of the voting rights, will give Olofsson until the end of the year to improve the Boulogne-Billancourt, France-based grocer’s performance in its domestic and largest market, said the people, who asked not to be named as the discussions are private. Carrefour has lost about a third of its market value amid an extended slump in France, where it is adjusting prices...
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How Pentamedia Graphics Ltd fooled investors, sold assets

New Delhi: Pentamedia Graphics Limited was once one of India's largest information technology companies. But today, Pentamedia Graphics Limited is "limping" on, with combined revenues of Rs 19 crore, a fraction of the more than Rs 1,000 crore it generated during its heyday. Pentamedia Graphics and its promoters fooled investors and stripped the company of its assets but still continue to hold on to prime land worth Rs 2500 crore. The company's stock hit a high of Rs 2,130 in February 2000, but are now trading at around Re 1. Pentamedia Graphics was also barred from stock markets in 2005 for manipulation...
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Olympus Urged to Purge More Executives

Olympus Corp. (7733)’s admission that three of its top executives colluded to hide losses from investors fails to address the roles played by other officials, according to the company’s biggest overseas shareholder. The Japanese camera maker’s shares slumped 29 percent yesterday after it reversed weeks of denials that there was any wrongdoing in past acquisitions. The company fired Executive Vice President Hisashi Mori over his role in covering up the losses with former Chairman Tsuyoshi Kikukawa, who resigned last week, and said auditor Hideo Yamada would step down. Olympus’ biggest overseas shareholder is now demanding investor relations head Akihiro Nambu go...
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CEO of JP Morgan, India shares her experience as a successful Investment Banker

Kalpana Morparia
Ms. Kalpana Morparia is the Chief Executive Officer of J.P. Morgan, India. She shares her insights on the current M&A environment and discusses the skills required to become a successful investment banker.
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Fiery shareholders force Crompton Greaves to sell the jet to unlisted Avantha Group entity

MUMBAI: Under fire from miffed institutional shareholders, Delhi-based billionaire Gautam Thapar's Avantha Group has decided to ease the burden of a recent aircraft purchase by power equipment maker Crompton Greaves to calm this set of influential investors. Crompton Greaves, which had bought the aircraft for an estimated Rs 270 crore last fiscal, may sell the jet to an unlisted group entity at the price at which it was purchased, said two people familiar with the matter.   Top Crompton officials have been meeting fund managers of mutual funds and insurance companies that hold the stock to convey this decision. The two persons who did not want to...
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Activist Anil Singhvi gives governance-shy India Inc jitters, raises corporate governance issues at Hindalco

MUMBAI: In 2002, Sterlite Industries faced investors' wrath after launching a controversial share buyback programme under which it dispatched cheques in advance to shareholders leading to complaints that the offer was forced upon minority shareholders. The Anil Agarwal-controlled company wanted to buy back 50% of its equity from the public through a court-approved scheme of arrangement rather than the normal channels for buyback in the Companies Act. A public furore failed to make the firm backtrack and the case quickly became a cause celebre in Indian investors' long and frustrating fight for better corporate governance. At that time, Anil Singhvi, was...
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Online CFA Level 1 Practice Exams

Free Online Tests from India's Leading Finance Forum DG has partnered with Pristine to create this online test system. The questions have been provided by Pristine (http://www.edupristine.com/).   How it'll work? Login with your Facebook or Twitter ID Select the test that you wish to take The test will be timed and should be completed within the stipulated time frame Your score along with the correct results will be displayed at the end of the test 
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