You may approach the Kerala High Court in this regard as the buy back of the shares should be done at a price as per the book value. The share is delisted so there is no certified market value.
Extinguishing of minority equity shareholders stake in the company
FCI OEN India Ltd is a delisted Company situated at Kochi, Kerala. I hold some 200 shares in the Company which I refused to sell back when delisted. My wife holds some 23 or so shares as well. All these years some people acting perhaps at the behest of the company was mopping up the minority share holders shares. I refused to sell back to them. Now they are FCI OEN is going to forcibly extinguish the equity (minority) stakes in the company by extinguishing only those part of the shares held by such equity shareholders like me and forcibly paying a fixed some of about Rs.710/- per share to us. This does not seem justified. In fact if they want to extinguish the shares they should extinguish all equity shares including those of the promoters. What is the legal position. Unnikrishnan C, CHANDUVARATH JAYA SRIKRISHNA SREYAS NAGAR, POST OLLUKKARA, THRISSUR PIN 680655, KERALA, INDIA
Asked 8 years ago in Business Law
8 Answers
Where should a case related to the above be filed?
Asked 8 years ago
under section 66 of companies act company can reduce the share capital by paying off minority shareholder
2) special resolution needs to be passed and reduction confirmed by company law tribunal
3) the courts would consider whether non promoter shareholders have been paid fair value
4) whether majority of non promoter shareholders are in favour of such a resolution
5) further under section 236 of companies act if acquirer is holding 90 per cent or more shares has right to acquire shares of minority shareholders at price determined by registered valuer
Dear Client,
When a company is delisted, its stock no longer trades on one of the major stock exchanges. In a direct sense, nothing happens to a shareholder when delisting occurs. The shareholder still owns the same percentage of the company as before, and he is free to sell the shares to any willing buyer.
In your case company may be buying out existing minor stockholders in exchange of cash.
AND purchase of minority shareholding is permissible by registered holder of ninety per cent. or more of the issued equity share capital of a company, or in the event of any person or group of persons becoming ninety per cent
But offered price to the minority shareholders of the company for buying the equity shares held by such shareholders at a price determined on the basis of valuation by a registered valuer in accordance with such rules as may be prescribed.
Check if offered price is evaluated by registered valuer.
If you have reliable proof for such an action by the company in question, you may lodge a complaint with ther SEBI or any other competent to take decision on this.
First issue a letter of notice to the company in this regard instructing them to restrain from acting against the interest of the investors/shareholders.
Later on you can approach competent authority seeking relief and remedy for this.
Where should a case related to the above be filed?
You can lodge a complaint with the SEBI or approach civil court or company law board for a suit seeking relief of injunction and other reliefs.
Dear Sir,
Under Company Law the minority share holders have powers to claim for winding up of the company itself. You have two options that is filed a case before company law board or High Court seeking relief of winding up or necessary directions against to all the concern not to create forcible circumstances to sell your shares.
Read Sec 236 of Companies act and if u fulfill the requirement of Sec 244 than file application u/s 241 of the Act before Tribunal.
And if the value is not determined by registered valuer than offered price shall be decline.
Hi,
You are suggested to send legal notice and then initiate court case.
