One of the largest, tax free, wealth creations in the country happened last weekend with the shareholders of IT majors, Wipro and Infosys Technologies, giving their nod to the issue of one time special dividends to the tune of 1250 per cent and 2000 percent respectively.
At Wipro, the dividend payout for the year ending March 31, 2004 totalled Rs 675 crore. This includes in addition to the one time special dividend, a cash dividend of 200 per cent. Company chairman Azim Premji who owns 84 per cent of the company gets Rs 566 crore. The balance Rs 109 crore will be distributed amongst the other shareholders of the company. It transpires that 96 per cent of Wipro’s shareholders own less than 500 shares in the company accounting for a mere 0.63 per cent of the total equity.
The six promoters and their families including NS Raghavan, who retired from the company a few years ago, who own 26.5 per cent of Infosys, will collectively be richer over Rs 220 crore. The balance of Rs 630 crore will land in the hands of Infosys 67,000 shareholders, of whom a whopping 63,500 are individual shareholders with a voting strength of 14 per cent.
At the present moment, dividends are tax-free. The full article can be read here.