When a promoter has pledged his holdings , who gets dividend , is it promoter or the other party?

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1

When a promoter has pledged his holdings , who gets dividend , is it promoter or the other party?

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2

Promoter.
Whenever anyone pledges the stock, he/she is still the owner and eligible for all corporate actions.
Only shares can’t be sold by them without unpledging.

3

Thanks Akash,

I have a follow up question. If ownership still lies with the promoter, then how come the institution sells the pledged shares in case the share price goes below a certain level.

Hope my question is clear.

4

That is the whole concept of pleding asset, you continue to enjoy all benefits of ownership, but if you violate any condition of pledge, counter party can take ownership and dispose off assets.

To give a simple real life example - Consider you taking home loan and buying a home. Effectively you have pledged your home to get the loan.
Now you are owner of home and can rent it out to someone and start enjoying rent income (even though home is pledged to bank)
But if you stop paying loan emi, bank will repossess home from you and sell it off.

Hope this gives better idea.

5

Thanks Akash,

I have no more doubt on promoter pledging .

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