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2 OCBs get Govt nod to buy equity shares of Orchid

Our Bureau

Chennai , April 6

TWO overseas corporate bodies, Medrox and Harpline, have sought and received the Union Government's permission to buy the equity shares of Orchid Chemicals & Pharmaceuticals in the open market.

Orchid Chemicals is an export-oriented unit that manufactures largely antibiotics. The company's Managing Director, Mr K. Raghavendra Rao, said the two OCBs had secured an "enabling permission" to increase their stake in the company.

He added that they already had an equity stake in the company.

Mr Rao said relevant investment laws for EOUs dictated that foreign entities need the Government's permission to buy equity. The law does not apply to foreign institutional investors and non-resident Indians.

According to Mr Rao, the law has made it necessary for foreign entities to approach the Union Government through the company they wished to invest in. The company's role is limited to informing the Government about the foreign entity's wish.

The foreign shareholding in Orchid Chemicals as of December 31, 2003 was 47.03 per cent.

The company's share price on Tuesday increased by 6.87 per cent over the previous close to Rs 230.25 at the National Stock Exchange.

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