Billionaire Azim pledges $1.95 billion of Wipro stake to charity
MUMBAI: Azim Premji, chairman of Wipro Ltd., plans to transfer shares valued at 88.3 billion rupees ($1.95 billion) to a trust and use the dividends to fund philanthropic work in India.
Premji, ranked the thirdrichest Indian with a net worth of $17.6 billion by Forbes India in September, will transfer 213 million shares to an "irrevocable trust," Wipro said in a statement to the Bombay Stock Exchange yesterday. The transfer will be completed by Dec. 7, the company said.
Premji is increasing his philanthropic work amid a call by Warren Buffett to billionaires to give more of their wealth to charity. Premji's trust is expected to increase its activities "significantly" over the next few years, according to India's third-largest software exporter. The trust may get 852 million rupees in dividend next year, Bloomberg Dividend Forecast shows.
"The annual dividend is a good sum and sufficient enough to run the yearly operations," said Sachin Mulay, a spokesman for Wipro. The money will be used to run the Azim Premji Foundation and the Azim Premji University, he said.
Buffett said in August that he will hold more dinners in the U.S. to encourage fellow billionaires to pledge part of their fortunes to charity. He'll also ask wealthy Chinese and Indian businesspeople to give their money away as part of the Giving Pledge, he had said.
The chief executive of Berkshire Hathaway Inc., whose fortune was estimated by Forbes magazine at about $45 billion, has pledged to donate the bulk of his wealth to the Bill & Melinda Gates Foundation, the world's largest philanthropic organization, with goals including the reduction of poverty and disease and the improvement of U.S. education.
Gates said in Beijing Sept. 30 he may attend a philanthropy event in India in 2011. Indians gave away about $7.5 billion to charity last year, according to a March report by Bain & Co., compared with $300 billion contributed by the U.S. in 2009.
Tata Group and its related philanthropies donated $50 million in October to Harvard Business School to fund a new academic and residential building in Boston for executiveeducation programs.
The Azim Premji Foundation, set up in 2001, works to promote elementary education in rural areas where a majority of the 1.3 million government-run schools are located, according to the group's website. The foundation employs a team of 200 professionals and several hundred paid volunteers.
Premji will continue to retain voting rights on the shares held in the trust, Wipro said. The 213 million shares constitute 8.7 percent of Bangalore-based Wipro's equity.
Wipro has risen 4.3 percent this year, lagging behind the 14.4 percent advance in the Bombay Stock Exchange's benchmark Sensitive Index. The stock rose 1.6 percent to 421.5 rupees in Mumbai at 10:05 a.m.
The company paid a dividend of 3.59 rupees a share this year and may pay 4 rupees apiece for the year ending March 31, according to Bloomberg Dividend Forecast.
Moreover, Rolta India Ltd., a maker of software for companies such as Chevron Phillips Chemical Co., expects to return to a profit growth this year on increased demand for its products from India's military.
Net income may rise 15 percent in year ending March 31, said Hiranya Ashar, chief financial officer at the Mumbaibased Rolta. -PB News