26 September 2015
The brief facts of the case were that the company proposed to extinguish and cancel 8, 89,169 shares held by shareholders constituting 25 per cent, of the issued and paid up share capital and return capital to such shareholders at `183 per equity share of `10 each so cancelled and extinguished in accordance with section 100 of the Act. According to the scheme as approved by the shareholders, the reduction of 25 percent, of the issued and paid up capital was to take place from amongst 3,835 share holders which included 112 shareholders who voted for the resolution, and 3,723 shareholders who did not object to the resolution. As equity shares of the company were listed with the Bombay Stock Exchange and Pune Stock Exchange it filed a draft of the proposed petition with the stock exchanges. The company presented a petition under section 101 of the Companies Act, 1956, seeking confirmation of reduction of the share capital of the company. The Bombay stock Exchange raised objections, inter alia, that (i) the share holders who did not cast their votes in the course of the postal ballot were being treated as if they had accepted the proposed scheme, the reduction of share capital of the company should be either applicable to all the shareholders or to only those shareholders who had specifically agreed to the reduction of share capital and (ii)the closing price of the shares was considerably higher than the exit price being offered to the shareholders.
CAclubindia
