Rights of Miinority shareholders

This query is : Resolved

raj (Querist)
Follow

03 September 2009 Hi
i have a question.
A Company was in dire need of further capital. The majority representing 98% of the shares were willing to provide the capital if they could buy-up the 2% minority shares. The majority passed a resolution altering the articles and enabling them to purchase the minority shares. The minority shareholders refused to surrender their shares and challenged the validity of the majority resolution.

what section needs to be seen for the above? and can the minority do anything abt it?

Ankur Garg

Ankur Garg (Expert)
Follow

03 September 2009 Hi,

You have mentioned that co. need further capital.

But the solution adopted by majority shareholder was nor correct and oppresive to minority.

There is no need to alter article to this effect.

Can u tell me how could majority provide capital by buying share of 2% holders?

The intentions of majority is 100% melafide.

Minority can take action under section 397 of the companies act, 1956.

Regards

Ankur Garg

Ankur Garg (Expert)
Follow

03 September 2009 To raise further capital you may issue further equity shares by allotment.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now