CLB directs putting off EGM by IFCI

The Company Law Board (CLB) today deferred the EGM called by Industrial Financial Corporation of India (IFCI) to appoint directors on the board of TFCI, in which the former holds 37 per cent stake. Allowing the plea of Tourism Finance Corporation of India (TFCI), the CLB deferred the extraordinary general meeting (EGM) called by IFCI on January 17 to appoint directors, till its further order.

“...Therefore, EGM to be held on January 17 is deferred till further order,” said CLB Chairman, Justice D R Deshmukh in his order.

CLB’s direction came over the plea of TFCI, challenging the move by IFCI to appoint its director on TFCI board.

IFCI had issued a notice on December 15 for holding EGM of TFCI.

The following day, IFCI approached CLB seeking directions to TFCI not to appoint additional director on the board. CLB had then directed status quo. “The parties are directed to maintain status quo till the further order. Except the steps already taken, no further steps will be taken for holding EGM,” CLB had said.

On January 11, TFCI approached CLB alleging violation of its order by IFCI. It said IFCI had not revealed, in its petition, plans to hold the EGM . “There was no mentioning that company has, on December 15, initiated the process of calling EGM by issuing notice,” said TFCI’s counsel.

He alleged IFCI had not even informed market regulator Sebi and the stock exchange of its plans to hold the EGM. Moreover, even TFCI was not informed about the EGM, added Chaudhary.

However, IFCI contended that it had the statutory right to hold the EGM, because TFCI had earlier rejected its request to convene the meeting.

Its counsel said IFCI was the single-largest shareholder with 37 per cent stake in the company and was entitled to convene the EGM after the expiry of 21 days from the date of refusal to hold the same by TFCI.