CLB lifts stay on J&N issue, pulls up Turner Morrison
Nandini Goswami
Calcutta, Dec 29: Paints major Jenson & Nicholson has received a green signal for the infusion of fresh capital through the equity or preference route. The Company Law Board has vacated an earlier ex-parte ad-interim order secured by the Amit Judge-controlled Turner Morrison group in this regard.The CLB, while taking serious note of the "non-disclosure of material facts" by the Turner Morrison group, has said that a restraint order could not be passed on the basis of "apprehended action" but only on "impending, definite and concrete action" if any. In its December 2 ruling, the CLB vacated its interim order which had stayed Jenson & Nicholson from increasing, issuing and alloting further equity or preference capital. The paints company had sought the vacation of the ex-parte interim order passed on November 10, 1997, questioning the maintainability of the petition by Turner Morrison group. The CLB has strongly noted the "non-disclosure of material facts" by Turner Morrison in its petition seeking
issuance of ex-parte restraint order under Sections 397 and 398 of the Companies Act of 1956. The CLB has stated that it would not have have passed the ex-parte order but for the Turner Morrison group's stated apprehension that Jenson & Nicholson was likely to implement its decision taken at the May 20 board meeting to issue preference shares, which could possibly dilute Turner's shareholding to less than 14 per cent.According to documents available with The Financial Express, the CLB has said: "Unfortunately, the petitioners (Turner Morrison) neither brought to our notice that the said proposal had later been approved by the general body, nor that one of the petitioners had sought to obtain a stay-order against holding that annual general meeting in the Calcutta high court which was not granted." Moreover, the CLB stated that the fact that one of the petitioners attended the general body meeting where the proposal of preference shares was approved was also not mentioned while seeking an ex-parte order.
Taking strong note of Turner Morrison's omission, the CLB said: "We were also not told by the petitioners while asking for an ex-parte order that the entire money paid along with the application was refunded to the petitioners and they had accepted the same after encashing the cheques." "It also appears that one of the petitioners asked for leave from the Calcutta high court in the proceedings before it for encashment of the cheque issued to him." CLB has thus justified its decision to vacate the restraint order. While vacating the order, the CLB has upheld its decision in favour of J&N, saying that: "In view of the fact that the company had acted on the said resolution and has already alloted preference shares worth Rs 8.7 crore as against Rs 10 crore and that it has already received subscription for the balance Rs 1.3 crore, our restraint order which was issued particularly with reference to the preference shares has become infructuous".
Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.
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