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Reconstitution of board -- Modi brothers to meet FIs

K.R. Srivats

NEW DELHI, Sept. 19

A RECAST of the board of Modi Rubber Ltd (MRL) does not seem far-fetched with the Modi brothers set to approach the heads of financial institutions over the next few days to deliberate on the future course of action that may be necessary for running the company under a ``single management.''

Even as the transfer of LIC's 9 per cent stake (approximately) in MRL has been kept in abeyance till a final order is pronounced by the Mumbai High Court, sources said that the Modi brothers' combine has enhanced its stake from 12.53 per cent to about 38 .53 per cent following the allotment of the remaining 26 per cent shares of the open offer.

The open offer was made by the Modi brothers' combine for an additional 35 per cent stake in MRL. The total response to the offer was about 43 per cent.

Sources said that the new shareholding pattern that has emerged following the completion of the open offer process, as directed by the High Court, may even prompt the Modi brothers to seek reconstitution of the board.

Pending disposal of the case on the 9 per cent holding of LIC, the Modi brothers' combine has emerged as the single largest shareholding group in MRL.

Meanwhile, investment banking sources said that allotments for the 26 per cent stake in favour of the acquirers (Modi brothers' combine) have been completed and cheques have been issued.

The financial institutions -- LIC, UTI, GIC, IDBI, IFCI -- controlled about 44.25 per cent stake in MRL before the open offer commenced.