CLB suspends voting rights

NEW DELHI: The Company Law Board (CLB) on Friday passed an interim order suspending the voting rights of McDowell & Co Ltd (McDowell) and United Breweries Holding Ltd who had recently-acquired shares in Shaw Wallace & Co Ltd (SWC).
According to a company release, the decision acquires significance against the backdrop of the ongoing litigation at the Bombay High Court wherein McDowell has filed a suit seeking various injunctions and interventions against the SWC management as a shareholder in the company.
When contacted by ET, the official spokesperson of the UB group said, “As far as CLB is concerned, we have no intimation. Therefore, we are not in a position to comment.’’
The release said today’s interim order comes in the wake of an application by SWC seeking ad interim injunctions against McDowell and United Breweries Holding Ltd from exercising any rights including voting rights or receiving any benefits of the 5,000 shares each that the respondents had acquired in SWC.
SWC had maintained that the share acquisition by the respondents was not bona fide but with the intention to interfere in the affairs and management of SWC and to act to the company’s detriment. The acquisition of shares was thus considered fraudulent.
The most recent attempt by McDowell to hinder SWC’s business was the civil suit filed before the Bombay High Court in October 2002 seeking ad interim injunction to nullify the business restructuring process and seeking many other reliefs.
The Bombay High Court was not convinced of the bona fides of the McDowell’s plea and, thus, refused to grant any interim relief to McDowell in that case.
The CLB order passed by Mr K K Balu concluded, “Under the circumstance, I find substance in the contention of the learned counsel for the applicant (Shaw Wallace) that the respondents who could not exercise any right as shareholders of the earlier acquired shares in physical form in view of the stay granted by Calcutta High Court of the order of the Board on more or less the same grounds raised by the applicant in the present petition, should not be allowed to exercise rights as shareholders in respect of the presently acquired shares in demat form�.