section 397

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kusum (Querist)
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14 November 2008 If a Director of company holding 5% share increase his shareholding from 5% to 55% by issuing fresh capital without offering that to others. Is this amount to Opression or mismanagement with in the meaning of section 397 or 398 of Companies Act 1956. Please specify the case law related to above matter.

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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14 November 2008 The issue will be illegal u/s 81. The cause of opression arises from there.

Ravikumar.G

Ravikumar.G (Expert)
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17 November 2008 The conduct can be said to be oppression only when it is burdensome, harsh and wrongful. Oppression involves an element of lack of probity and fair dealings to a member.

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