NetSol Price Plunge Prompts Sale of President's Stock
Calabasas, California, Nov. 1 (Bloomberg) -- NetSol International Inc., a Pakistani software developer, said an unidentified lender sold 72,900 shares pledged by Najeeb Ghauri, its president, as collateral for a loan after the stock price fell and he didn't repay all the money borrowed.
Ghauri pledged 448,750 shares to guarantee the loan, according to the company's proxy, filed yesterday with the Securities and Exchange Commission.
The loan's terms required it be paid back if the stock fell below $20, according to the proxy. That happened on Sept. 15. The stock fell steeply over the spring and summer, after reaching a high of $80 on March 3.
``Due to a decline in NetSol's stock price, the financial institution demanded the entire loan be paid back,'' the company said in the proxy.
The shares were sold between Sept. 15 and Sept. 30, when the stock traded between $11.31 and $21.94. NetSol gained 31 cents to $9.19 today.
Ghauri declined to comment on the stock sale.
NetSol, then known as Mirage Holdings Inc., went public in 1998 as an importer of exotic clothing from Pakistan. That business soon soured and it bought a software company from Najeeb's brother, Salim Ghauri, and changed its name to NetSol.
For the fiscal year ended June 30, NetSol's loss doubled to about $3.4 million, or 35 cents a share, from $1.6 million, or 44 cents, on fewer shares.
Revenue rose to about $7 million from $3 million.
The shares have dropped 89 percent from their May high, creating a paper loss of $150 million for the company's largest shareholder, the Blue Water hedge fund group of Manhasset, New York. The fund owns 19 percent, or 2.1 million shares.
Nov/01/2000 18:31 ET
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