| Wipro chairman Azim Premji in New Delhi on Tuesday. Picture by Prem Singh
New Delhi, Aug. 30: Wipro chief Azim Premji has called a meeting with his top executives in Bangalore tomorrow to discuss the issue of reducing his 82.3 per cent stake in the company.
The move comes in the wake of a directive issued last Friday by the Securities and Exchange Board of India (Sebi) that gave promoters holding more than 75 per cent in their companies two years to raise the public stakeholding to at least 25 per cent.
The Sebi order has sparked some confusion over whether or not the directive will apply to Wipro which draws a substantial part of its revenues from information technology.
In 2001, the market regulator had said that technology, media and telecom companies would be allowed to have a public holding of 10 per cent.
Wipro, which started off as a vegetable oils business and later branched off into information technology, isn’t sure whether the directive will apply to it and there has been no clarification from Sebi on this score.
Close to 300 companies will be affected by the directive.
Premji told reporters here today, “There is an intent to reduce (the stake) at an appropriate time. Today, I cannot tell over what period of time.”
The meeting tomorrow will deliberate on whether Wipro is exempt from the Sebi directive. Premji refused to say what he thought of the issue. “I have been busy with something else that it (reduction in the stake) has not been on my mind. I am going back to Bangalore tomorrow and will discuss it,” Premji added.
The move to force promoters who hold high stakes in their companies to dilute their holdings has been coming for some time. In January, Sebi amended the takeover code to integrate its provisions with the delisting guidelines of the stock market. It set a minimum public shareholding limit of 25 per cent for all listed companies. The promoters ' including associates and friends ' have been given time to reduce their stake so that it doesn’t precipitate a slide in the biggest bull market in recent years.
Premji said he was very pleased with the company’s operations in Bengal. “The state has been doing much better than others. Its efforts should be replicated by the Centre. It is an irony that the same party at the Centre is stuck in political rhetoric, while in the state it is doing an excellent job,” he added.
He also rejected the notion that the state was facing an acute shortage of IT professionals. Premji said, “It is not unique to Bengal or Calcutta; we have faced similar situations before.”
Premji, who has blasted the Karnataka government in the past over the deterioration of infrastructure, said the improvements in Calcutta’s roads could be seen each month.
He said Wipro was looking to go into new areas, including Russia, Hungary and Romania. “China will be a priority but we would like to focus on it later. We are concerned about intellectual property issues there,” he added.
Bangladesh and Pakistan have good potential provided they take care of their infrastructure and local issues, he added. “It is not military or economic power that will determine a nation’s place in the world now in making, but the brainpower which would be reflected in a country’s economic competitiveness. The ability of the nation to make best use of brain power will shape its place in the world in this century,” said Premji.
Earlier in the day while delivering the JRD Tata memorial lecture organised by Assocham, Premji advocated effective land reforms and interlinking of rivers to give impetus to economic growth.
“Effective land reforms can boost the housing and retail sectors.”
He said land related laws, taxation and information systems needed to be overhauled.
“Almost 90 per cent of the land in India is subject to legal disputes over ownership. Stamp duty ranges from 8 to 15 per cent of the property value, encouraging avoidance. On the other hand, property taxes are low and collection inefficient,” Premji said.
Stressing the need for executing projects like inter-linking of rivers, Premji said less than 40 per cent of the cultivable land was under assured irrigation. Besides, ground water table was declining 5 per cent annually.