Coal India Ltd (CIL) is set to launch an enquiry to investigate as to why some of the bids submitted by its employees during its initial public offering were rejected. The objective is to fix responsibility and then initiate action to compensate the employees if necessary.
It has also been decided that in case it is found that the fault was not with the employees themselves, then they would be given some sort of compensation, CIL Chairman P. S. Bhattacharyya said.
This (compensation) may be in the form of a monetary payout that would enable the affected employees to buy the shares at the current market price, with the company picking up the tab on the difference between the current market price and the price at which the employee would have got share after a 5 per cent discount.
The compensation would be made, in case it is found that the employees had missed out on the opportunity of booking some early profits due to some negligence on the part of the registrars, the banks handling the demat accounts, or some department within the company, but not due to the applicant's fault. However, the employee would have to pick up the exact number of shares that he or she had bid for.
On November 4, the listing day, the Rs.245-a piece priced share, closed at Rs.342 and many liquidated a part of their holdings to score early gains.
The compensation amount will be recovered from the agency responsible. If it is an internal fault, then responsibility would be fixed and the persons may be issued a show cause notice.
Some 3,000 applications submitted by CIL employees seeking an allotment of over 7.5 lakh shares were rejected due to errors in the bids.
While the share-sale evoked good response from within the country and outside, majority of the 3.9 lakh employees of CIL and its subsidiaries did not participate in the issue due to various factors, including trade union advice against it. Over 90 per cent of the employees are unionised.
For an issue which was oversubscribed by 15 times, employee participation was a mere 25,000.
