Shares of a Private Company

samu1001 · #1 28th April 2011, 07:42 PM

I bought 500 shares of a company in a private placement from a broker. This private placement was to be followed up by an IPO, but that did not happen. The company never went in for an IPO. I have the share certificates in my name. The company is operating under the same name that is on the share certificate and is doing well, I think (as per its website).

Do I have any rights or is my share certificate worthless?

Thanks for responses in advance.

Alchemist · #2 28th April 2011, 07:57 PM

As a minority shareholder of a private company, there isn't much you can do about the shares.

Are you getting any dividend?

Does the company send you an annual report?

Without knowing the name of the company, there isn't much that I can say about the worth of the shares.

Also I would like to know who was the broker who sold you the shares?

Alchemist · #3 28th April 2011, 08:23 PM

I have removed the term "private placement" from the title of the thread to avoid confusion.

Private placement can be done by private as well as public companies.

e.g.

"Rane Brake Lining" was a listed company in 2009, but it has issued 7,00,000 shares to its technology partner on a private placement basis.

Quote:

Rane Brake Lining Limited has informed the Exchange that: "The Company has allotted 700,000 equity shares of Rs. 10/- each issued at a premium of Rs. 40/- per share under the preferential issue of shares on private placement basis to M/s Nisshinbo Industries Inc., Japan (NII), the foreign collaborators to the Company, on April 13, 2009.

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