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Friday, Mar 13, 2009
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Business Daily from THE HINDU group of publications Friday, Mar 13, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Courts/Legal Issues Info-Tech - Software Corporate - Corporate Governance
Our Bureau New Delhi, March 12 The Division Bench of the Delhi High Court on Thursday rejected a Public Interest Litigation (PIL) filed by Mr Manohar Lal Sharma, who claims to be a shareholder of Satyam Computer Services. Mr Sharma had approached the High Court against the Ministry of Corporate Affairs and the present Board of Satyam, on the recent Company Law Board (CLB) order regarding preferential issue of shares, and for increasing the authorised capital of the Hyderabad-based IT company, without the members resolution. The petitioner claimed that such an action is ‘ultra vires’ and has been done without prior approval of the existing shareholders. Power to saveThe Division Bench, while rejecting the contention of the petitioner in toto, observed that the petition could not be termed as a PIL. The Division Bench directed the petitioner to seek other remedies as provided in the statute. The Division Bench also observed that “as such a petition under Section 397/398 of the Companies Act, the CLB has wide power and scope to save the company from being wound up”. In its argument, the Government counsel had submitted that such a petition would derail the entire roadmap for continuing operations, infusion of capital and tapping a strategic investor. Subsequent to the order, Central Government representatives stated that it would have far-reaching consequences and would pave the way for Satyam to find a strategic investor. More Stories on : Courts/Legal Issues | Software | Corporate Governance | Satyam Computer Services Ltd
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