NCLT dismisses minority shareholders plea for forensic audit at Golden Tobacco – The Economic Times

Clipped from: https://economictimes.indiatimes.com/industry/cons-products/tobacco/nclt-dismisses-minority-shareholders-plea-for-forensic-audit-at-golden-tobacco/articleshow/85109345.cmsSynopsis

The NCLT also dismissed the plea of minority shareholders, who together hold about 28.28%, to set aside a land deal that the maker of Panama cigarettes had entered into at Guntur in Andhra Pradesh.

The Ahmedabad bench of the National Company Law Tribunal (NCLT) has dismissed a petition of the minority shareholders ofGolden TobaccoNSE 4.97 % seeking a forensic audit of the company’s affairs since 2009.

The NCLT also dismissed the plea of minority shareholders, who together hold about 28.28%, to set aside a land deal that the maker of Panama cigarettes had entered into at Guntur in Andhra Pradesh.

It dismissed the pleas citing a petition pending before the Gujarat High Court, where also the minority shareholders had sought the same relief.

The company’s promoters, Sanjay and Anurag Dalmia, hold about 30.4% of its stake through various entities.

The minority shareholders argued that the net worth of the company had decreased from a cash positive of Rs 42.44 crore in March 2009 to a negative Rs 181 crore in March 2015. By March 2020, this had further dropped to a negative Rs 221.63 crore, they said.

The petitioners, including Kolkata-based JP Financial Services and three other entities, argued that the sale of valuable property such as the land at Guntur by a listed company required a special resolution under Section 180 of the Companies Act.

In order to bypass Section 180 of the Act, the respondents “wrongfully converted” the land at Guntur, a fixed asset, to stock in trade and received Rs 90.85 crore as advance from unknown buyers, the minority holders alleged. The value of the land would be around Rs 200 crore, they claimed.

Countering this, the lawyers for Golden Tobacco argued that the petitioners had approached the Company Law Board in 2015 with the allegations of oppression and mismanagement, but their petition was dismissed. Subsequently, the shareholders had challenged that ruling in the Gujarat High Court and that case is still pending, they said.

“The applicants have concealed and suppressed this vital information that … no other application has been filed on this issue,” said Golden Tobacco’s counsels, while denying charges of oppression and mismanagement or siphoning of any funds.

The tribunal, while dismissing the application on August 3, observed that it was a well-settled principle that forum shopping must be curbed for the same cause of action and that an applicant cannot seek relief from different forums for the same issue at different points in time.

“On this primary ground itself, the application filed by the applicant deserves to be dismissed,” said the tribunal in its 36-page order. “We hold that both the prayers made in this application and for the urgent relief are part of the petition pending before the Gujarat High Court for disposal, hence, propriety demands that we should not end adventure into this.”

Email queries to Golden Tobacco as well as SP Financial Services remained unanswered at press time Friday.

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