January 21, 2011

Binani Metals -Why Face Value Reverse Split to Rs.1000 ??

The recent consolidation ( Reverse split ) by Binani Metals Limited to the unprecedented Rs. 1000 Face Value per share is one of the most interesting and intriguing Indian corporate actions  vis-a-vis small shareholders. No other Listed company in India has a face value of Rs.1000.

Binani Metals Limited ( along with its many amalgamating companies like Metal Distributors Limited ) is more than 70 years old company .So it had many dormant ( dead share holders and Custodian of Enemy Property ) shareholders.

All those share holders holding below 10 or in not multiple of 10 were reduced to holders of fractional shares when Binani Metals Limited  decided to consolidate the face value ( from Rs. 100 to Rs. 1000 ) .These share holders were compulsorily paid pro rata  @ Rs. 450 for Rs. 100 face value " fraction " ( This was a mere fraction of the True Value and the Share was and still is Illiquid . No Trading in the only Regional Exchange  Calcutta Stock Exchange - since 1992 )  .

The interesting topic for further research and study is what became of the dormant and Custodian of Enemy Property share accounts. There shares were compulsorily sold . But what became of such unclaimed  Payment Warrants.

Probably they are still unpaid and that money is  with the Company !!!









General Warning : Investment in shares can be injurious to your WEALTH.

Caution :The blog writer has personal / family members' holdings in this company , so please make suitable "provisions " for vested interest .

( PS : All information given in good faith. Please recheck all facts etc. No responsibility with this author / blog. )

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