LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Explanatory statement

Manisha (CA & CS) (161 Points)

18 January 2012

Dear Sir,

Please request you to reply as soon as possible..

Mine is a query relating to interpretation.

If a public company has passed spl resolution in its AGM and the explanatory statement to the same states something more(as the background for the resolution), can this explanatory statement be challenged if there is no such clause in the resolution as such.

Pls reply with some supporting reference.

Thanks and Regards

Reply
Follow
Share

5 Replies

santhosh kumar (article student) (84 Points)
Replied 18 January 2012

explanatory statement shall be given incase of special resolution .And this explanatory statement shall state the descripttion of the matter stated in the special resolution.so it should be related the matters to discussed during the meeting. it should not include any othe matters otherthan the main one

Manisha (CA & CS) (161 Points)
Replied 18 January 2012

Originally posted by : santhosh kumar
	explanatory statement shall be given incase of special resolution .And this explanatory statement shall state the descriptttion of the matter stated in the special resolution.so it should be related the matters to discussed during the meeting. it should not include any othe matters otherthan the main one

Thanks Santhosh but the qs is not about what to write in the Explanatory statement. You have not understood the qs. The question is relating to the validity and enforceability of a particular statement which forms part of the explanatory statement but not the resolution.

Anyways thanks

Rakesh Dhanuka (Company Secretary) (478 Points)
Replied 20 January 2012

Purpose of explanatory statement is that shareholders knows the nature of the business to be transacted, based on which they vote. So, if suppose explanatory statement is telling four things will be done and in special resolution only three things are mentioned then it may be challenged (Refer Ramaiya).

Others view solicited.

1 Like

Manisha (CA & CS) (161 Points)
Replied 20 January 2012

Thank you Mr. Rakesh.

Can you pls direct where exactly in Ramaiya there is such a commentary.

I read but could find any such point.

Thanks & Regards

Rakesh Dhanuka (Company Secretary) (478 Points)
Replied 20 January 2012

The book does not refer any case which is related to your case. But if you read whole commentary to section 173, you will see that it may be challenged. You may refer "Disclosure of Materials Facts" in commentary to section 173. If you are referring 17th edition (2010) of ramaiya then itz on page number 2017.

2 Like