Date:15/07/2005 URL: http://www.thehindubusinessline.com/2005/07/15/stories/2005071502471300.htm

Back Flextronics top brass sell shares since delisting announcement

Virendra Verma

Mumbai , July 14

THE top management of Flextronics Software Systems (FSS) has started selling shares of the company following its parent company Flextronics plans to de-list FSS from stock exchanges.

Flextronics had said that it would not pay more than Rs 575 a share for purchasing the shares from the shareholders of FSS. At present, the stock is quoting over Rs 600.

In the first week of May, the Singapore-based Flextronics announced plans to de-list by purchasing the outstanding publicly-held shares through its wholly-owned subsidiary Flextronics Sales & Marketing. Flextronics holds 69.74 per cent in FSS.

Filings with stock exchanges show that Mr Arun Kumar, President and Managing Director of FSS and other senior officials of the company have been selling the shares since May. For instance, Mr Arun Kumar has sold 16,600 shares in May and June. Similarly, Mr Aadesh Kumar, Alternate Director of the Company, has sold 13,349 shares. Officials of FSS had sold a total of around 47,000 shares in May and June.

Select brokers and analysts said the officials of FSS are taking advantage of higher market price. "There is not much liquidity in the stock, so they are selling the shares as Flextronics is not going to pay more than Rs 575 a share," said a dealer with a domestic broking firm.

But others players said if Flextronics does not pay a higher price there will not be anyone to sell the shares. "There is a possibility of price discovery through reverse book-building more than the current ruling price," said a retail shareholder of FSS.

He further stated that until institutions such as HSBC Global Investment Funds, Oppenheimer Funds, Templeton Mutual Fund and UTI offer their shares, the issue would not sail through. These institutions hold more than 13 per cent in the company.