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Polaris-OrbiTech merger on, votes board

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CIOL Bureau
New Update

Sudarshana Banerjee



NEW DELHI: The Polaris board met on December 30, 2002 and unanimously agreed that the tussle with the Bank Artha Graha (BAG) was a 'commercial dispute', even as shareholders of Polaris and OrbiTech meet on the same day in an Emergency General Meeting (EGM) convened by the company on the Polaris-OrbiTech merger.



Though the counting of votes on the merger is still on, a highly placed official with the company informed CNS that the company was sure of a result in favor of the merger. High court appointed chairman in the proceedings is Mahesh, an advocate with the Chennai High Court.



OrbiTech is a 93.25 percent technology subsidiary of the Citigroup and as per earlier announcements by the company OrbiTech would merge with Polaris with 100 shares of OrbiTech being converted to 42.65 newly issued Polaris shares, as against the originally proposed swap ratio of 14:25.



As a result, existing Polaris shareholders would own 52.75 percent and Orbitech shareholders would own 47.25 percent of the merged company. The total enhanced share capital of the merged entity would be approximately 97 million shares. The new shares are expected to be listed in the BSE, NSE and MSE, post the statutory formalities. The new merged entity would function as an independent company and Citicorp will just be a financial investor.



In another development, the company has appointed Arvind Kumar, Supreme Court lawyer and a director on the Polaris board to head the legal committee that would oversee actions against BAG. Kumar would coordinate with the legal department of BAG in moving arbitration proceedings in Singapore as specified in the contract between the two warring parties.



There would be an affidavit signed once the two parties reach a mutual understanding. How long are the arbitration proceedings expected to take? The issues could be resolved in a day, or may drag into years, informed a source within the company. Polaris would also move legally in Indonesian courts to quash any criminal charges as per Indonesian laws, as also take legal actions questioning the detention of Arun Jain, Chairman, Managing Director and CEO of Polaris along with Rajiv Malhotra, Senior Vice President, Polaris.

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