Financial Daily from THE HINDU group of publications
Thursday, Sep 30, 2004
Regulatory Bodies & Rulings
Corporate - Corporate Disputes
CLB vacates its order on BPL Communications
New Delhi , Sept. 29
CALL it a family feud or a corporate war between the patriarch of a company and his prodigy, the case of BPL Communications Ltd in the Company Law Board (CLB) seems to have all the ingredients of a high tension court room drama.
In a turn of events, the CLB on Wednesday vacated its interim order passed on Monday directing maintenance of status quo in shareholding pattern of BPL Communications. This, however, came with a rider, that any proposal to sell or transfer shares of the company will require prior permission of the board.
The board had in its interim order also allowed the petitioners, statutory inspection of records of BPL Communications and other companies Epsilon Advisers Pvt Ltd, Surya Samundra Finance and Investment Pvt Ltd, Vectra Holding Pvt Ltd, BPL Mobile Communications and BPL Mobile Cellular Ltd - which now stands vacated.
It may be recalled that a petition was filed by Mr T.P.G. Nambiar, promoter and Chairman of the BPL group, and three group companies, against his son-in-law, Mr Rajeev Chandrashekar, Chairman, BPL Communications Ltd, and other companies, for oppression and mismanagement.
Mr Nambiar and others were challenging acquisition of shares by Mr Chandrashekar. The shareholding pattern of BPL Communications has been manoeuvred in such a way that Mr Chandrashekar held controlling interest of 32 per cent in the company, the petitioners had submitted.
BPL Communications is the holding company for the group's cellular business.
Aggrieved by this order of the CLB, BPL Communications, Mr Chandrashekar, Surya Samundra Finance and Investment Pvt Ltd and Vectra Holding Pvt Ltd filed the current application seeking vacation or suspension of the said order.
At today's hearing, the CLB Principal Bench comprising Chairman, Mr S. Balasubramanian, noted that "at the time when the interim order was passed, the counsel for the petitioners expressed an apprehension, on the basis of certain press reports that there was a likelihood of sale or transfer of shares held by certain respondent companies which are in the mobile telephony business and such sale or transfer of the shares would be prejudicial to the interest of the petitioners."
Normally an interim order is passed to maintain a status quo till the disposal of the petition and accordingly the said order was passed, the CLB observed.
The object of proceedings for oppression and mismanagement is to protect the interest of a company. However, if an interim order affects the interest of a company, it has to be vacated, the Bench noted.
The Bench also directed the petitioners to file an affidavit as to whether copies of caveat had been received by them or not. At the hearing it was brought to the notice of the Bench that since all the registered offices of the respondent companies was in southern region, a caveat had been filed in August itself with the Southern Bench of the CLB with copies to the petitioners.
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