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bhavin — Tue, 26 Feb 2008 05:48:38 GMT

I really like to watch this channel I need to tell you about one share which is ..........English Indian Clays Share plunges 90%, irate shareholders want to know what’s happening l BSE blames merchant banker l Co officials give ‘hold’ call

MUMBAI: For shareholders of English Indian Clays, a Thapar group company, a horror story unfolded on February 13 when the share plunged 90%.

They were quoting at a handsome four figures till a godawful screw-up of the demerger process took the wind out of the stock.

Shareholders had expected a bonanza by way of compensation for the demerger of an investment division of EIC into Bharat Starch Products Ltd, also a Thapar Group company. Instead, they saw a dramatic erosion in value.

On Tuesday, the EIC shares had ended at Rs 1,690. The very next day, when the Bombay Stock Exchange (BSE) opened for trading, the stock opened at a specially demarcated price of Rs 179.

Though it closed at the 5% upper circuit of Rs 187.95, shareholders were left wondering as to what happened during the night of February 12 to warrant the value hacking.

Turns out, it had nothing to do with market sentiment, but may well be a case of sheer negligence.

The blame-game started immediately with the company asking BSE to suspend trading and correct the share price. BSE has so far refused.

An EIC source said senior company officials —- namely P S Saini, company secretary, and S K Jain, vice-president, finance —- were camping in Mumbai to take remedial measures.

According to him, they knocked on the doors of the BSE authorities and the Securities and Exchange Board of India to find a solution because the base price was been wrongly arrived by BSE officials.

Responding to a DNA Money questionnaire by email, BSE officials were emphatic that the fault lies with the investment banker who structured the demerger.

“We deny the wrong and baseless allegations to the effect that BSE has erred in the process relating to trading in the equity shares of English India Clays Ltd, post its demerger,” the spokesperson said.

PNR Securities, a banker based in Green Park Market, New Delhi, structured the demerger, which was in accordance with a scheme under Sections 391-394 of the Companies Act, 1956. The process was sanctioned by the high courts at Kerala and New Delhi.

Under the scheme, upon demerger of the investments division, investors shall be issued and alloted four fully paid up BSP shares for every nineteen shares of EIC held.

The shareholders also have an option to receive 8% cumulative redeemable preference shares of BSP in lieu of equity shares or sell the BSP shares to the promoter at Rs 1,000 per share within one year.

BSE explained in the mail: “As is the practice in all cases of demerger, the company was required to furnish a valuation certificate from a Sebi-approved merchant banker indicating the fair value of the equity shares of the company.” TODAY I RECEIVED A MAIL FROM THE COMPANY WHICH IS

English indian Clays Limited An ISO 9001 :2000 COMPANY) * Chairman

Dear Shareholderts),

The shares of your Company have been listed on the Bombay Stock Exchange (BSE) since 1994.

Recently you witnessed an unprecedented movement in the price of the shares of the Company.

On 12-02-2008 it closed at Rs.1,690/- per share and on 13-02-2008 the trading price was shown at Rs.185/- per share which was bound to shock the esteemed shareholders of the Company.

Let me first assure all of you that your Company is doing very well, implementing the growth plans of the company which inter alia includes the establishment of a starch project at Shimoga, Karnataka for which your Company is coming up with a Right Issue at Rs.1000/- ice. one Share of Rs.10/- each at a premium of Rs.990/- per share. The expected earning per share for the year 2007-08 is about Rs.45/- per share and the intrinsic value of shares of the Company has strengthened substantially.

As you are aware, a Scheme of Arrangement and Demerger was implemented by the Company; amongst the various documents your company filed with the BSE, at their request, was a certificate of fair value of the share, post deterger, duly certified by the Merchant Banker.

This fair value merely represents the Net Asset Value (N.A.V.)/Book Value of the Company\`s share, post deterger, at Rs.179/- per share. Uzlfort-tznately, and inadvertently, the BSE, without informing the Company of its intentions replaced the market price of the share with the Book value ignoring the recent trading history of the share, thereby causing enormous concern and confusion amongst all the shareholders of the Company.

The matter was taken up on an emergency basis with the Bombay Stock Exchange and Securities & exchange Board of india (SEBI) for taking necessary corrective measures to reinstate the market price of the share which is under their consideration.

I reassure all of you that the growth plans of the Company are under active implementation, as earlier mentioned, and invite your whole hearted support to the forthcoming Rights issue of the Company.

Sincerely yours km.- up :a ..-.\` -

KARAN THAPAR

Date : 25th February, 2008

Place : Gurgaon

Regd. Office : TC-79/4, deli, Thiruvananthapuram - 695 021 (KERALA) Corporate office : 801-803, Tower-Bs Global Business Park, M.G. Road, Clurgaon - 122 001 (Havana) Phone : (0124).2803379 - 83, Fax : (0124) 2803372

I REQUEST THIS CHANNEL TO PLEASE LOOK INTO THIS ISSUE

THANKS&REGARDS

BHAVIN

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