ECL Finance, a subsidiary of Edelweiss Capital, has acquired a 5.18% stake in Max India following pledge of shares against loans to some firms belonging to the promoters of Max India.
In a statement to the stock exchange, ECL Finance said that it had lent Rs 15 crore and Rs 75 crore to Trophy Estate and Gaylord Impex respectively. When asked whether there was a default on the loan, Max as well as Edelweise denied any such development.
“As security for the said loans, Liquid Investments, Maxopp Investment and Medicare Investments have collectively created pledge on 11,490,000 shares of Max India.”
These three are among a string of companies through which the promoter Analjit Singh holds nearly 34% stake in Max India. At Wednesday’s closing, the shares are worth Rs 250 crore. However, it was not clear why the Max India promoters had to pledge shares worth many times of the principal of the loan amount.
An Edelweiss spokesperson said as per the norms, the promoter group companies of Max India have pledged certain shares with ECL Finance as collateral against borrowings. “The pledger has no intention of selling the said shares,” the spokesperson said in a statement.
Source: Economic Times