Open offer of ISPAT & treatment of Preference Shares

Further to my letter dated April 6, 2011, I have done more research and all the results are pointing a needle suspicion towards all the parties involved- Ispat Industries--The TC , Jindals—the Acquirer, Mittals—the sellers and co-promoters of the TC. Kindly consider the following points:

On 20th December 2010, the Board Of Directors of the Target Company (TC) passed inert-alia that Preferential allotment will be made to the acquirer –JSW and 0.01% Cumulative Redeemable Preference Shares will be converted into Equity @ 19.85 per share.
On this news, 0.01% Cumulative Redeemable Preference Shares moved from 3 to 10.
While ISPAT took immediate action for Preferential allotment will be made to the acquirer –JSW and approved it in its EGM dated 18th January 2011, it did nothing till date for conversion of 0.01% Cumulative Redeemable Preference Shares
JSW revised the price of Open Offer to 22.25 , close to the market price. This revision is infructuous. It was not likely to make any difference to the no. of shares that will be tendered in the Open offer. The objective of the revision is very perplexing.
Just before the closure of the offer, the prices of the shares jumped with high volumes and at the same time that of 0.01% Cumulative Redeemable Preference Shares started falling.
The EGM’s proceedings available on the BSE website states that the meeting was held at KALAKUNJ Kolkata, where 602 members attended the meeting in person and 12 were present as proxy. It needs to be noted that capacity of the hall is approx 250 only where the co. claims that 614 persons attended it.


You are requested to Kindly



(i) Investigate the matter thoroughly to ascertain if there is a an attempt for market manipulation by first announcing the conversion of Preference shares causing the prices to jump from 3 to 10 and then not taking any action on it causing the prices to fall to 7.55. The slide continues. Investors have lost money heavily.

(ii) Investigate for insider trading- who are selling the preference shares now? Are these people in possession of any information that is not known to the market? Is there any plan by Isapt to cancel/defer the conversion of Preference shares?.

(iii) To safeguard the interest of small investors, direct ISPAT to come out with a categorical statement giving the timeline for conversion.

(iv) Check the participation in the Open offer. If the participation is more than couple of thousands ( accepting that some investors might have tendered their shares by mistake) then it must be further investigated. Who would tender their shares at a much lower price rather than selling them in the market for ready payment and Tax benefits.

(v) In addition to points raised in my letter dated April 6, 2011, direct the acquirer to accept EVERY Preference shares in the Open offer @ 22.25 since they are at par and as good as equity shares—Paid up value 10 with voting right. since dividend has not been paid on them for a period exceeding the time specified under section 87(2)(b) of the Indian Companies Act 1956, thus making it at par with equity shares of the company.