London: Minority investors in Essar Energy have appealed to the Indian and British governments to intervene to head off a forced takeover by its majority owner at a price they say undervalues the company.
Essar Energy is listed in London but remains 78 per cent-owned by Essar Group, an Indian conglomerate controlled by the Ruia family, which has offered 70 pence per share for the 22 per cent of Essar Energy it does not own.
Other Essar Energy shareholders and independent directors say the figure is too low - but because the majority owner controls more than 75 per cent of the shares it is in a position to push through the delisting regardless.
Robert Hingley, director of investment affairs at the Association of British Insurers, wrote to India's High Commissioner in London and British business minister Vince Cable about the matter on April 23. Copies of Hingley's letters were released to the media on Sunday.
Hingley said the forced delisting of Essar Energy would cause "real damage to the integrity of the UK market and to the reputation of Indian companies more generally."
The minority shareholders have also hired U.S. law firm Skadden Arps to advise them. Essar Energy and its majority owner have so far declined to comment on the moves taken by investors unhappy with the delisting plan.
Essar Energy owns power and oil assets in India and operates Britain's second-biggest oil refinery, Stanlow, in northwest England.
Since it listed in London nearly four years ago, the company has faced a string of problems, including slow growth in its Indian operations, delays in getting coal licences, a tough tax regime in India and a fall in margins at Stanlow.
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