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Promoter gifts Rs 6.5 cr shares to 3 directors

By BS Corporate Bureau in Mumbai
October 14, 2005 10:24 IST
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Financial Technologies Chairman and Managing Director Jignesh P Shah has gifted shares worth Rs 6.5 crore (Rs 65 million) to three company directors from his personal holdings.

This is possibly the first instance in corporate India of a promoter gifting his own shares to employees.

Shah gifted 55,122 shares, representing a stake of 0.13 per cent, to these employees last week. The share price of Financial Technologies rose by 3.93 per cent today to close at Rs 1135.85. The stock hit its 52-week high of Rs 1,659 on September 21. Its 52-week low was Rs 71.20, on October 25 last year.

Dewang Neraalla, who is with Financial Technologies for 10 years, has received 28,211 shares. V Hariharan and Arshad Khan have received 10,000 and 5,000 shares, respectively.

Hariharan is with the company for 6 years and Khan, for over five years. While both Hariharan and Neraalla joined the company as directors, Khan has risen from the ranks.

"They are professionals who have made the company what it is today. Gifting shares from my personal stake is the right way of rewarding them. I will continue to do this for committed professionals," Shah told Business Standard.

Financial Technologies had introduced an employees' stock option plan (ESOP) sometime back. Market sources said Financial Technologies might come out with another ESOP shortly. However, shares offered under the scheme carry a price tag.

"An ESOP does not have flexibility as the number of shares that can be offered to an employee are restricted, depending on the position of an employee. Besides, it is a pre-determined scheme and one cannot raise the number of shares for the real performers," Shah said.

According to the latest shareholding pattern, the promoters -- Shah and his associates-- hold a 47.74 per cent stake. Of this, Shah holds a 19.42 per cent stake.

Tax experts said the recipients of the gift might have to pay tax at the time of encashing the shares.
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BS Corporate Bureau in Mumbai
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