The recent Company Law Board order restraining the board of directors of The Hindu group of publications from enforcing certain major personnel changes was challenged today before the high court here.
N Ram, chairman, publisher and editor-in-chief of the group, filed an appeal at the HC to set aside the CLB order. The matter was adjourned to June 16.
On May 20, the CLB restrained Kasturi & Sons, the company which runs The Hindu, from removing four members of the family which holds the stock, including editor N Ravi, from the Editorial Board. It also pulled up Ram for not adhering to its earlier direction (given last year) on a proper succession plan.
The appeal against the order was filed by Ram and five other family members, including The Hindu Business Line’s editor, K Venugopal, also a director of the board. It questions whether the private grievance of shareholder(s) pertaining to their personal interests in specific positions of power/status in the company can be the subject matter of a petition under Section 397-398 of Companies act.
The petition says CLB erred in entertaining the company application and passing an interim relief without first adjudicating on the issue of maintainability of the petition. Also, that it erred in interfering with policy decisions of the appellant company, approved by the board (on April 18) and by a majority of shareholders (on May 20).
The stay against implementation of the resolutions passed in the extraordinary general meeting of May 20 was not warranted, it said. It has made a special mention in this regard of the appointment of Siddharth Varadarajan, head of the Delhi news bureau, as next editor of The Hindu.
“The Board failed to appreciate that as had been pointed out, most of the professionally run and top newspaper companies in the country were in fact headed by professional personnel despite having several family members as their shareholders,” the petition said.