Capital First Ltd.'s founder and chairman V Vaidyanathan gifted shares worth Rs 20 crore to his family, colleagues and employees for their support when things were downhill.
In an exchange filing today, Capital First's board approved Vaidyanathan's proposal to transfer 4.29 lakh shares “as a gift without any consideration”. Following the gifting of shares, Vaidyanathan will own 36.1 lakh shares in his personal capacity, and 4.94 lakh shares as a trustee of Rukmani Social Welfare Trust to which he'd transferred shares earlier this year.
Vaidyanathan expressed to the board that in the early days of Capital First “it neither had access debt lines nor had easy access to equity”. He said that during 2010-13, the macro-economic environment was disturbed with rising interest rates making it difficult to build a business. “Under such circumstances people joined him leaving well-paying jobs, worked hard, conceptualised strategies, introduced innovations and discovered new lines of business,” the board said in its filing. It was due to their contribution, the filing said, that Vaidyanathan was eventually able to raise equity and turn around an “enormously successful” company that now manages about Rs 32,000 crore of assets.
As a token of expressing his gratitude to those who brought us here, Mr. Vaidyanathan has expressed his desire to transfer part of his personal holdings to the said colleagues. The list of colleagues contains three names of those who have left the organisation, but their contribution could not be forgotten.Capital First Statement.
Vaidyanathan transferred 2.86 lakh shares to his colleagues, and 1.10 lakh shares to his family members, excluding those who may be deemed as successors or heirs. The personal staff, which includes his two drivers and three house-helpers, received 6,500 shares each.
The board said that as Capital First prepares for its merger with IDFC Bank Ltd., Vaidyanathan wanted to thank those who chose to support him.
The board said that the share transfer is purely on a voluntary basis and there is no intention of any tax structuring or any other reason. It said that all recipients will pay the applicable taxes.
The company's market capitalisation currently stands at Rs 4,718 crore, with each share valued at Rs 477.
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