2015 (3) TMI 1396 - HC - Companies Law

Permission to reduce the capital and the Securities Premium Account as resolved by the Extraordinary General Meeting - HELD THAT - Presently, in view of the decision to reduce the share holdings such of those public minority share holders who have not objected to receiving their share money would be paid and such of public minority shareholders who have opted to retain their holdings shall be continued as shareholders of the petitioner company. Hence, the object of the reduction of share holding is achieved by the decision taken by the petitioner company. The petition is allowed and reduction of capital as resolved at the Extraordinary General Meeting held on 13.01.2015 which reads as hereunder is confirmed - Form of minutes under Section 103(1) of the Act as set out below is approved.

Summary

Issues:
Reduction of share capital and Securities Premium Account as per resolutions passed by Extraordinary General Meeting and Board of Directors.

Analysis:
The petitioner-company sought permission to reduce the capital and Securities Premium Account as per resolutions passed by the Extraordinary General Meeting and the Board of Directors. Initially, objections were raised by some shareholders regarding the reduction of share capital. However, the company addressed the grievances of the objectors and decided to retain the share money of 189 public shareholders, including the objectors. A modified resolution was passed by the Board of Directors to reflect this decision, which was approved by the court. The objections were withdrawn by the objectors after their grievances were addressed by the company.

The proposed reduction in share capital was initially from Rs. 492,32,89,808 to Rs. 476,14,24,110. However, after addressing the grievances of objectors and deciding to retain their share money, the revised proposed capital reduction was to Rs. 483,66,21,630. The resolution aimed to pay the excess money to shareholders due to the unlisted nature of the company's shares, making it challenging for minority shareholders to sell their holdings. The decision to reduce share holdings was designed to pay shareholders who did not object to receiving their share money while allowing those who opted to retain their holdings to continue as shareholders.

The Board of Directors passed a resolution to reduce the issued, subscribed, and paid-up equity share capital of the company, along with reducing the Securities Premium Account. The resolution detailed the process of reducing the share capital and the Securities Premium Account, including the cancellation of certain fully paid equity shares held by non-promoter shareholders. The court granted the prayer made in the petition, confirming the reduction of capital as resolved at the Extraordinary General Meeting.

The court's order confirmed the reduction of capital and Securities Premium Account as per the resolutions passed, specifying the new paid-up share capital and Securities Premium Account amounts. The petitioner company was directed to deliver a certified copy of the order, including minutes, to the Registrar of Companies within 30 days. Additionally, the notices of reduction of share capital and scheduled minutes were to be published in designated newspapers within 14 days from the date of registration of the order.