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In a major relief for the promoters of Vadodara-based Jyoti Ltd, the Supreme Court on Tuesday set aside the order by the Gujarat High Court thereby giving the company a breather from a hostile takeover threat by Mumbai-based Bharat Patel and his aides by removing CMD Rahul Amin and the board of directors.
The stock market welcomed the development as the company’s shares hit the upper circuit on the BSE to close at ₹67.10, up 10 per cent from the previous close.
Jyoti had filed a petition before the Supreme Court challenging the Gujarat HC order dated February 19, 2015, directing the company to supply a list of members to Bharat Patel and others within a period of one week.
“It was directed that Bharat Patel and others on receipt of such list of members according to rules from the company, it would be open to them to take further actions in accordance with the law, to convene the EGM,” the order had said.
Future course of actionCommenting on the court order, Amin said, “We will plan a detailed course of action after receipt of the order from the Hon’ble Supreme Court. Meanwhile, normal working of the company will continue.” The company has about ₹600 crore worth pending orders, he said.
The company had alleged that Patel and Mumbai-based Finquest Financial Solutions Pvt Ltd were using ‘illegal’ means to convene an EGM of the shareholders of Jyoti Ltd on March 17. According to company sources, Patel had cornered large chunk of the company’s shares directly or indirectly, which surpassed promoters’ holding at 32 per cent.
Patel’s movesPatel had sought removal of the board of directors, including Rahul Amin, alleging he was not running the company professionally and was causing financial loss to the shareholders.
Jyoti had approached the local court in Vadodara to counter Patel’s plan to convene the EGM. But the lower court did not allow Patel to convene the EGM, following which Patel had approached the Gujarat HC, which had allowed Patel to go ahead with the plan to convene the EGM.
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