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2024 (8) TMI 191 - Tri - Companies LawOppression and mismanagement committed by the Respondents - Section 241-242 of the Companies Act, 2013 read with the other provisions of the Companies Act, 2013 - Seeking injunction against offer letters, action pursuant to the offer letters and further issuance of shares - matter regarding first Rights Issue is pending before this Tribunal for consideration - HELD THAT - After going through the prayers, in this application and also on the facts that when the matter regarding first Rights Issue is pending before this Tribunal for consideration; the subsequent Rights Issue during the pendency of the Company Petition i.e. CP No. 18/BB/2024 comes very much in the purview of this Tribunal for necessary orders. In the present facts and circumstances of the matter, this Tribunal hereby restrains the Respondents from going ahead with the present rights issue which is in progress till the disposal of the main CP No. 18/BB/2024. The Respondents are further directed to keep the amounts collected so far since opening of the second rights issue in relation to this offer in a separate account which should not be utilised till the disposal of the main petition in CP No. 18/BB/2024. Further, status quo with regard to existing shareholders and their shareholding shall be maintained till the disposal of the main petition CP No. 18/BB/2024. The Respondents are directed to comply with the directions given, regarding the details of allotment of shares on 02.03.2024 and the details of the Escrow banks accounts by filing a compliance affidavit with a memo within a period of 10 days; duly serving the copy on the otherside - List this matter before regular bench on 04.07.2024 along with main petition i.e. CP No. 18/BB/2024 for further consideration.
Issues Involved:
1. Injunction against offer letters and further issuance of shares. 2. Setting aside actions violating Tribunal's previous order. 3. Allegations of oppression and mismanagement. 4. Compliance with statutory provisions of the Companies Act, 2013. 5. Contempt of Tribunal's order. 6. Inclusion of preference shareholders in rights issue. 7. Siphoning of funds and financial irregularities. Issue-wise Detailed Analysis: 1. Injunction against Offer Letters and Further Issuance of Shares: The Applicants sought an order to injunct the offer letters dated 11th May 2024 and 13th May 2024, and any actions pursuant to these letters, including further issuance of shares. The Tribunal restrained the Respondents from proceeding with the second rights issue until the disposal of the main petition (CP No. 18/BB/2024). The amounts collected from the second rights issue were directed to be kept in a separate account and not utilized until the main petition's disposal. 2. Setting Aside Actions Violating Tribunal's Previous Order: The Applicants requested to set aside any actions taken by the Respondents in violation of the Tribunal's order dated 27th February 2024, including the allotment of shares on 2nd March 2024. The Tribunal noted that the same issue was raised in the contempt petition No. 06 of 2024 and would be considered together. The Respondents were directed to file complete details of the share allotment and Escrow bank accounts. 3. Allegations of Oppression and Mismanagement: The main petition (CP No. 18/BB/2024) alleged various acts of oppression and mismanagement by the Respondents. The Tribunal acknowledged the ongoing investigations by the Enforcement Directorate (ED) and Ministry of Corporate Affairs (MCA) against the Respondent No. 1 Company and the LOC against the main Promoter/Respondent No. 2. 4. Compliance with Statutory Provisions of the Companies Act, 2013: The Applicants argued that the rights issue violated Section 62(1)(a) and Section 62(1)(c) of the Companies Act, 2013, as well as Section 179 and Section 175 regarding Board resolutions. The Respondents contended that they had complied with the provisions and included preference shareholders as per the Articles of Association. The Tribunal required the Respondents to provide detailed information on the share allotment and compliance with the statutory provisions. 5. Contempt of Tribunal's Order: The Applicants filed a contempt petition for the violation of the Tribunal's order dated 27th February 2024. The Tribunal noted the pending contempt petition and directed the Respondents to file their reply. The Tribunal emphasized that the contentions raised in C.A No. 72 of 2024 would be considered along with the contempt petition. 6. Inclusion of Preference Shareholders in Rights Issue: The Applicants argued that combining equity shares and preference shares for rights issue entitlement violated Section 62(1)(a) of the Companies Act, 2013. The Respondents contended that preference shareholders were included as per the Articles of Association. The Tribunal directed the Respondents to provide details of the preference shareholders' allotment. 7. Siphoning of Funds and Financial Irregularities: The Applicants highlighted ongoing investigations and alleged siphoning of funds amounting to US$ 533 million. They also pointed out the delayed filing of financials for FY 2021-22 and non-filing for FY 2022-23. The Tribunal noted these allegations and directed the Respondents to maintain status quo regarding existing shareholders and shareholding until the main petition's disposal. Conclusion: The Tribunal restrained the Respondents from proceeding with the second rights issue and directed them to keep the collected amounts in a separate account. The Tribunal also required the Respondents to provide detailed information on share allotment and Escrow bank accounts. The matter was listed for further consideration along with the main petition and the contempt petition on 4th July 2024.
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