IPCL shareholders oppose merger with RIL

17-Apr-07

The shareholders of Indian Petrochemicals Corporation Ltd (IPCL) have strongly opposed the firm's merger with Reliance Industries Ltd. (RIL). The shareholders termed the poll process illegal as coercive methods were being used to obtain signed proxy forms from IPCL employees who are its shareholders under the Employee Stock Option scheme (ESOP). Shareholders alleged that many of them, despite having security cards issued by the IPCL management, were prevented at the entrance to the hall at the company premises. According to IPCL union leaders, more than 800 employees-shareholders were prevented from attending the meeting. Some of the employees also demanded that they be allowed to withdraw their applications given under voluntary retirement scheme. On March 10, the boards of directors of RIL and IPCL had approved the scheme of both the companies' merger. RIL's associate companies hold 47.3% of IPCL's equity share capital. RIL acquired equity shares of IPCL in June 2002 after the Centre announced disinvestment. In an order on March 16, the Gujarat High Court directed Indian Petrochemicals Corporation to convene a meeting of the shareholders on April 14 for the purpose of considering the merger proposal by voting. Reliance Industries acquired equity shares of IPCL in June 2002 after the Centre announced disinvestment of the petrochemicals major. Shareholders also raised the issue of merger of six sick units into IPCL in 2006 which was done with a view to decrease the profitability of IPCL. They said this would ultimately benefit RIL in the present proposed scheme. These shareholders requested Justice Dave to look into the interests of small investors before deciding on merger of IPCL into RIL.