KARACHI, May 29: The Mansha group on Saturday managed to wrest control of Adamjee Insurance Company Limited, marking the first successful 'hostile takeover' bid in the country's corporate history.

The Mansha group is arguably the country's largest conglomerate with interests in cement, textiles and banking, with MCB being its flagship.

For the past two years, the group had set its sights on Adamjee Insurance, the largest insurance company in Pakistan commanding nearly 40 per cent share in the total non-life insurance business in the country.

The company holds Rs1.5 billion in equity and Rs7 billion in total assets.

The annual shareholders' meeting of Adamjee Insurance was held on Saturday, after a 16-month-old stay against the holding of the meeting was set aside by the Supreme Court of Pakistan on March 15.

Six seats on the nine-member board of directors were secured by the Mansha group at the end of four-hour long shareholders' meeting and counting of votes. The Adamjees retained three.

Four of the 19 contestants withdrew their names before the elections. The fact that among them was the company's chairman, Mohammad Hanif Adamjee, signalled that the erstwhile owners had given up hope even before the votes were cast.

The three members of the Adamjee clan who were voted to the board included: Abdul Hamid Adamjee, Abdul Razak Adamjee and Mohammed Choudhury. The last-mentioned has been holding the post of company's managing director for many years.

Just before the race began on Saturday, the Mansha group was officially in possession of 38.5 per cent shares in Adamjee Insurance comprising 29.5 per cent stake by the group-controlled Muslim Commercial Bank and 9 per cent owned indirectly: 4 per cent through MCB Employees Provident Fund and 5 per cent by MCB Employees Pension Fund.

But punters believe that the group had accumulated another 8 per cent of the 20 million floating stock from the market. With about 46 per cent shares already in their pocket, the corporate raiders had only to gather 5 per cent 'proxies' from the 30 per cent stock held by individuals.

"That was why the kind of proxy war that was expected did not take place," said one shareholder. A strong force of some 170 small shareholders had come to attend the meeting, but the majority were noticed to have retired to the tea tables even before the results were announced.

Now trading at around Rs93, the share in Adamjee Insurance has multiplied almost five times in value since the lows of Rs20 it had touched a couple of months before the beginning of the current bull run in 2002.

Some punters ascribed the stock's phenomenal climb more to investors' expectations of windfall gains in case of a proxy war between the contesting group than to fundamentals.

"Now that the two-year-old suspense is over, the share would settle down to its true worth, which could be lower or higher than its current price," observed an equity trader.