CLB restrains Birla Corp from passing special resolution

The Company Law Board (CLB) has restrained Birla Corporation from proceeding with a special resolution seeking amendment to the Memorandum of Association (MoA) of the company through postal ballot for foray into the new business of money market operations.

Minority shareholders of Birla Corporation led by Birla Education Trust had moved the CLB against the postal ballot special resolution.

The CLB chairman had said last Friday in the order "the company had issued a postal ballot notice with the object of amending the MoA with the intention of commencing certain new business in May 2011 to carry out money market operations including dealing in securities and other instruments."

The chairman Vimla Yadav observed that if the company entered this kind of business, then the present management and its staff and employees did not have the experience required.

"The company will be left to the venture in markets that are notorious, volatile and speculative," he observed.

The board had also appointed Ernst & Young as an investigative auditor to probe the accounts of the company during 2008-09, 2009-10 and 2010-11.