Union of India, Ministry of Company Affairs v. Padmini Technologies Ltd.

Oppression & Mismanagement

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Section 397 of the Companies Act, 1956 - Oppression and mismanagement - Government filed petition under section 397, read with section 408, alleging oppression and mismanagement in affairs of respondent-company and seeking appointment of directors by Government on board of company - Facts revealed that company incurred heavy loss by purchasing shares of a

company at exorbitant rate which amounted to misuse of funds; that it had violated provisions of various sections of Act; that SEBI had conducted enquiries into affairs of company; and that creditors were also fighting case against company before Debt Recovery Tribunal - Further company entered into business with those companies which subsequently became vanishing companies and company had not made any efforts for recovery of money

from those companies which resulted in loss to respondent-company - Majority of shareholding of respondent-company was held by members of public and stake of managing director and other members was far less - Whether on facts to safeguard interest of shareholders, public and company, Central Government was to be directed to appoint its directors on board of

respondent-company - Held, yes

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Reference Info:n/a | India


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Vinay Talwar, Corporate Consultants | Attorney Advertising

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