Sharad Kantilal Shah, one of the large shareholders of Henkel India, has raised objections to the sale of 14.9% stake in the company. Henkel’s Indian co-promoter, A C Muthiah, on Wednesday sold 14.9% of his 16.7% stake to Jyothy Laboratories.
Shah alleged the deal was by no means stuck at a fair valuation, as the average traded price during the last 11 months was substantially higher. “The deal smacks of insider trading. It is dubious and has caused huge loss to shareholders,” said Shah.
Shah, his wife Trupti and associate company Astral Securities hold 6.7%, or 7.8 million shares, in Henkel.
The deal was struck at Rs 35 a share, a discount of 19% over Henkel’s closing price on Tuesday. Today, Henkel shares fell 5% to Rs 45.25 on the Bombay Stock Exchange.
Jyothy paid Rs 60.7 crore to buy the Henkel share.
Muthiah has been involved with Henkel for 25 years, first as a joint venture partner and then as a co-promoter of India operations.