LIC will get 1.6 million shares at Rs 96.63 each, a slight discount to the market price of Rs 97.95. Even so, there’s a rider. The bank has mentioned in the EGM notice that, “The voting of LIC is restricted to 10 per cent of the total voting. Hence, issuance of fresh shares will not increase their voting right.”
Regulation 12(2) of the Banking Regulation Act said, “No person holding shares in a banking company shall, in respect of any shares held by him, exercise voting right (on Poll) in excess of 10 per cent of the total voting rights of all the shareholders of the banking company.”
Further in terms of Section 3 (2E) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, the voting right of LIC will be restricted to 10 per cent of the total voting right of all shareholders of a bank.
