A 20-year-old dispute between Chennai-based Amalgamations and one of its shareholders has come to an end with the National Company Law Tribunal, Chennai, having ruled in favour of the former. The petition was from Shankar Sundaram, who owns 10 per cent in Amalgamations, alleging oppression and mismanagement in the group. He alleged though the company had more than 40 subsidiaries, it was run like a single economic unit, impacting the functioning.
Amalgamations Group was founded by S Anantharamakrishnan and Amalgamations is the holding company. The group is in diverse business activities — manufacturing of automobile engines and generating sets under Simpson & Co, agricultural machinery and equipment manufacturing under TAFE, battery manufacturing under AMCO Batteries, making pistons and piston rings under India Pistons, industrial cutting tools under Addison & Co Ltd, to publication of books and periodicals under Higginbothams, among others.
After the founder's demise, the shares were inherited by his descendants. Shankar Sundaram, son of Anantharamakrishnan's daughter, inherited 10 per cent of the shares in Amalgamations after her demise. He moved a petition in 1999 with the erstwhile Company Law Board requesting an independent administrator be appointed to take charge of its affairs, to terminate appointment of certain directors of some group companies, to appoint him a director of the board, to entrust him with an office of profit in one of the larger profit-making subsidiary companies, and to order an independent investigation into the foreign operations of the company, among others.
The matter was later brought to the NCLT in Chennai. A single-member bench issued the order last week.
The group has to be treated as a quasi-partnership firm and Sundaram should be given a seat at the board of directors, argued K Ravi, counsel for the petitioner. Krishnan Srinivasan, who appeared for the group and group companies, argued it could not be considered a partnership firm -- it was incorporated as a private company and ownership of shares and management were separate. He said many of the board seats are held by professionals and experts from outside.
Mohd Sharief Tariq, judicial member of the NCLT bench here, has in a detailed order decided no case had been made by the petitioner for granting what he'd asked for.
"However, this order in no way will bar any negotiations between the petitioner and the respondents regarding any share purchase," he said, while rejecting a request of Sundaram for a buy-back of shares.