Aggrieved investors are reportedly planning to approach SEBI and move the courts against those Gujarat-based Public Sector Enterprises that have agreed to set aside part of their Profit Before Tax (PBT) for Corporate Social Responsibility. They have said the move violates the rights of minority stakeholders.

Sources have said that the Chief Minister’s vision to accelerate social development in Gujarat from funds raised as compulsory contributions from the cash-rich PSEs have not gone down well even with a section of his most ardent supporters. They have said while his motive is right, the manner in which he has gone about scripting the state’s social upliftment is being questioned.

The Gujarat Industrial Power Corporation Limited (GIPCL) and the Gujarat Mineral development Corporation (GMDC) have already ceded to the proposal to cough up a maximum 30 per cent of their PBTs to the Gujarat Socio-Economic Development Society (GSEDS) headed by the CM himself. The other four PSEs are expected to formally do the same at their AGMs over the next few days.

Besides the stiff resistance from investors, the announcement has also caused an almost 25 to 30 per cent erosion in the value of the scrips of these PSEs in less than a month.

A top broker of the city said there has been a bear run on the shares of the six PSEs over the past month ever since the proposal was made public. “The Gujarati investors were banking on Narendra Modi’s track record in the economic arena where under his stewardship many loss-making PSEs like GSFC were nursed back to health. They had invested heavily in these blue-chip companies and are now booking their losses,” he said.

... contd.