PI Industries Ltd, one of the reputed companies listed in the National Stock Exchange (NSE) and a market leader in their field, has refuted the claims of a Kochi-based businessman Babu Valavi that he was holding shares of the company which monetarily transferred would lead to an amount of Rs 1,448.5 crore.
What is the case?
The Kochi-based businessman claimed that he and his close family members were holding 3,500 shares of the Udaipur-based Mewar Oils and General Mills, an unlisted company that was making edible oil at that time.
He said that this was in 1978 and over the years the company changed its name to PI Industries and expanded its business to chemicals and pesticides manufacturing and now has a market cap of Rs 50,000.
Babu Valavi had also claimed that when the family had bought the shares, they had a 2.8 per cent stake in the company and now the ownership of the Valavi family translates to 42.28 lakh shares.
PI Industries' reply
However, PI Industries refuted the claims of the Kochi businessman and clarified stating that it was incorporated in 1946 and that it is listed as Public limited company in both National Stock Exchange and Bombay Stock Exchange and is one of the highly valued companies and a market leader in their area of activity.
The company also stated that the Valavi family had sold all the shares held by them in 1989 itself and that the said transfer was recorded in the company records as well as in the annual returns of the company for the year 1988-89 and filed with the Registrar of Companies, Jaipur.
PI Industries also said the Valavi family had approached the company only in 2015 about their alleged shareholding and that the company had responded then that all the shares held by the family were sold in 1989 itself.
The company also stated that the Valavi family had after a few more years filed three sets of complaints with SEBI in 2018, 2019 and 2021, on the same issue and said that SEBI closed all the complaints in favour of the company. PI Industries also said that the Valavi family did not even challenge the decision of SEBI.
The company also said the Valavi family has valued their alleged shares at an incredulous Rs 1,448 crore and that no rationale or logic has been provided in this regard.
Company secretary of PI Industries in the statement said, "When the Valavi family had purchased our shares in 1978, their holding was 2.8 per cent of the total paid-up capital of Rs 11.90 lakhs. However by 1988-89, around the time of their sale of shares, their holding had come down to 0.88 per cent because the Valavi family had not subscribed to the three rights issues undertaken by the company."
The Company also said, "Even if Valavi company had held on to their shares (which clearly they have not), such shareholding would have been minuscule in the current paid-up capital of Rs 15.17 crore. It is, therefore apparent that the Valavi family has falsely claimed the value of their alleged equity holding to be Rs 1,448 crore, a figure significantly inflated to grab media attention."
PI Industries also said the allegations of the Valavi family that it did not receive information about dividends and the name change of the company are unbelievable and completely false. The company stated that it had circulated its annual reports and declared regular dividends to each and every shareholder at the relevant period of time.
The company also said that when it was listed with the stock exchange in 1983, the names of the members of the Valavi family had even featured in the list of shareholders as at that time Valavi family had not sold off their shares.
PI Industries also refuted the claims of the Valavi family that two senior officials of the company had met them for settlement sometime in the year 2016 and said that it was a total misinterpretation of facts.
The company said that two officials of the company who were on a business trip to Kerala had met Babu Valavi on a courtesy call as requested by the Chairman of PI Industries. The company said that this was a courtesy call to Babu Valavi as an old distributor of the company to convey and explain the factual status as per the records of the company.
The company also said that this courtesy call was misinterpreted by the Valavi family to allege that senior officials had reached out to him for a settlement.
The PI Industries in a statement also said that it had already issued a legal notice against Valavi family on September 20, 2021 for causing to publish inaccurate reports in media and that an FIR has been registered against the Valavi family on their deceitful and ill-motivated actions.