The National Company Law Tribunal (NCLT) Kolkata Bench on Monday declared the allotment of shares by the company in favor of the promoters as void. NCLT The purchase of shares of the company by the promoters from Lodha was also declared null and void. These transactions took place in 1987 and 1988 respectively.
The court said that the owners of these shares would have to give up their holdings and the company and Lodha would have to return the dividends and other profits earned during these years, as applicable.
It has appointed a special officer to ensure compliance of the decision and to immediately cancel the allotment of shares.
In their order dated, Harish Chander Suri (Member Technical) and Rohit Kapoor (Member Judicial) of NCLT Kolkata said, “We think this is an appropriate case for appointment of a Special Officer, considering the serious nature of the violations and financial mismanagement. In view of our findings, there is a suitable case.” 18 July.
Insolvency professional Krishna Kumar Chhaparia has been appointed as Special Officer.
The NCLT said, “It is absolutely clear that there were malafide intentions with a view to providing undue benefit to the beneficiaries of the allotment of shares, which was against the interest of the company.” Some of the shares were allegedly allotted to the relatives and businesses of the promoter family.
ET has reviewed the copy of the order.
With a potential change in ownership structure, a management overhaul may be imminent.
“The order that has come is nothing but a stage of litigation. The order is subject to challenge, which we will certainly do, and we are confident that the final verdict from the higher forum will go in our favour,” said PGFI Managing Director Jayanta Roy, Sunil Kanti’s son Roy and grandsons Unique Founder Radhashyam Roy.
The issue dates back to 1987 when Peerless considered a special proposal to issue 30,000 equity shares for cash by private placement. A year later, Lodha, who was then a director of the company, resigned from the board.
“I brought in Lodha as a majority shareholder in the company in 1986 when Sunil Kanti Roy was looking for a new investor. I have not read the order, but if the court order paves the way for Lodha to get majority, I welcome it,” said PC Sen, who was the chairman of Peerless General Finance and Investment Company (PGFI). between 1986 and 1996. SK Roy then took over as the Managing Director after the demise of his father BK Roy.
In 1988, promoters bought 15,626 shares using bank loans taken against fixed deposits of a company allegedly by Lodha, Bhagwati Developers Pvt Ltd and other shareholders.
The petition was originally filed in 1991 before the Calcutta High Court by Ajit Kumar Chatterjee and Arghya Kusum Chatterjee – both shareholders of PGFI. After nearly three decades, the matter came to the fore Supreme courtwhich transferred the matter to the Kolkata Bench of the NCLT.
Parmal Lodha said, “The NCLT order is a testament to my resilience.” “A young financial professional should take a leadership role at Peerless to reorient the company,” he said.
Peerless started its journey as an insurance company in 1932 and then became a household name as a deposit collection company in Bengal reserve Bank of India In 2011 it stopped doing so. Peerless Group’s existing businesses include hospitals, property and hotels.