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| EGM to appoint new addl directors on TFCI board invalid: CLB |
| Press Trust Of India / New Delhi Mar 23, 2011, 00:24 IST |
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In a set back to the financial institution IFCI, the Company Law Board (CLB) today set aside the extraordinary general meeting (egm) convened by it for appointing five of its nominees on the board of Tourism Finance Corporation of India (TFCI).
Passing a judgement, the CLB held the meeting called on January 17 by IFCI as invalid, saying: “The meeting was convened in violation of its earlier order.” It also set aside requisition of IFCI for convening the meeting. The direction of the board came over a petition filed by tourism finance body TFCI seeking to restrain Industrial Finance Corporation of India (IFCI) from holding the general meeting.
IFCI, which has 37.5 per cent share holding in TFCI and two directors on the company’s board, wanted to appoint five more directors, much against the wishes of the company. It also wanted to remove one of the independent directors, a move opposed by TFCI.
After the dispute, IFCI conveyed requisition under Section 169 of the Companies Act, which provides that any person or firm with more than 10 per cent share in a company can call EGM even if the company denies to do so.
However, the bench today said, “Requisition dated November 26, 2010 is declared invalid. It is further held that TFCI was justified in declining to hold a meeting under requisition by IFCI.”
“It is further held that issuance of notice on December 15, 2010 by IFCI, after the order was passed by me, for conveying a meeting on January 17 is a fraudulent act in utter violation,” CLB Chairman Justice D R Deshmukh said while rejecting the plea of IFCI.
CLB’s directions follow cross applications filed by TFCI and IFCI against each other over the issue. In this matter, minority shareholders of TFCI had also approached the CLB against IFCI, alleging that it was secretly acquiring the company’s shares to gain management control. In the earlier hearing of the case, the board had asked for status quo to be maintained on the board of TFCI till further orders.
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