India's Premji Gives $2.3 Billion to Charity
02/22/2013| 10:46am US/Eastern
By Dhanya Ann Thoppil
BANGALORE--Indian billionaire Azim Premji Friday donated shares worth 123 billion rupees ($2.3 billion) in Wipro Ltd. to a philanthropic trust he controls, shortly after joining Bill Gates and Warren Buffett's Giving Pledge club.
Mr. Premji transferred 295.5 million shares from his stake in Wipro to the trust which controls the Azim Premji Foundation, a not-for-profit organization working in the education sector in India. The shares represent 12% of the total outstanding shares of Wipro, the country's third-largest outsourcing services company.
This is his second major donation to charity. In 2010, Mr. Premji transferred 88.46 billion rupees ($1.6 billion) worth of shares he and his family held in Wipro to the trust.
"This trust will utilize the endowment to fund various social, not-for-profit initiatives of the foundation, which are expected to scale significantly over the next few years," Mr. Premji said in a statement.
The move comes three days after Mr. Premji joined the Giving Pledge club, which was created to encourage the world's wealthiest people to give at least half their fortunes to charity.
The Wipro chairman, 67 years old, is the first Indian to join the club. According to the Forbes billionaires list for 2012, he was the third richest in India and 41st globally with a net worth of about $16 billion.
The Giving Pledge club was established in 2010 and includes investor Carl Icahn, media mogul Ted Turner, New York Mayor and Bloomberg LP founder Michael Bloomberg, and Virgin Group Ltd.'s Richard Branson.
There are a number of Indians who have pledged their wealth to philanthropy, though they aren't part of the Giving Pledge club.
Shiv Nadar, chairman and founder of outsourcing company HCL Technologies Ltd. has pledged to set aside 10% of his wealth for philanthropic purposes. Mr. Nadar was 13th in India on the Forbes billionaires list with a net worth of $5.6 billion.
Sunil Bharti Mittal, chairman Bharti Airtel Ltd., has as a trust that works in the field of education.
Tuesday, Mr. Premji reiterated his commitment to transfer more wealth to expand the foundation's work. "I strongly believe that those of us, who are privileged to have wealth, should contribute significantly to try and create a better world for the millions who are far less privileged," he said after joining the Giving Pledge club.
Bangalore-based Wipro was founded nearly seven decades ago by Mr. Premji's father, M.H. Hasham Premji, as a producer of an edible oil called vanaspati, which is popular for cooking in India.
Mr. Premji took charge of Wipro in 1966, after his father's death. Since he took over, the company has diversified into businesses such as medical devices, technology outsourcing and consumer products.
Wipro is listed both in Mumbai and on the New York Stock Exchange. It posted more than $7 billion in revenue in the last fiscal year ended on March 31, 2012.
The Azim Premji Foundation works mainly in rural India in partnership with state governments to help them improve the quality of education. It has also set up a university for the poor in the southern Indian state of Karnataka.
Mr. Premji said the foundation will expand its operations over the next five years by setting up more district- and state-level facilities and schools. He also plans to increase the headcount at the foundation to about 4,000 staff from 800 currently.
Mr. Premji, his family and entities controlled by him held 78.3% of the company as of Dec. 31, according to stock exchange data. Of that, the trust owned 7.9% and the Azim Premji Foundation 0.4%.
With the latest transfer, the trust's shareholding in Wipro will go up to 19.9%, Mr. Premji said.
Friday, Wipro's shares ended 2.4% higher at 415.55 on the Bombay Stock Exchange where the benchmark sensitive index closed flat.
Write to Dhanya Ann Thoppil at email@example.com
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