HONDA - not the HERO of its shareholders

Going by the convoluted way in which the shareholding is being transferred by Honda to the Hero group with total disregard or total detriment of the other shareholders speaks volumes of the chicanery that exists in the system.

The most transparent way would have been for HONDA to have given these shares as a rights to all existing shareholders (would have been 1 share for every 3 shares held) at the price of 740/-.

The other issues that are interesting to watch out for here are the action that the IT department will take for the implied gift being given by HONDA to HERO - almost 1100 per share when the agreement was initially drafted to a more sedate 800 per share now. that works out to 240/- per share as a gift tax that the hero group will have to pay to the govt for the gift received by it!!

also the immediate sale of these shares to PE players at a price above 1540 would also call into play short term capital gains tax. keep watchig this space to see what the IT department does in this deal.

SEBI has snored through the entire episode - lets see what what the tax collector does ...