Corporate Oppression: Directors v/s Shareholders
company clat_pg beginner case_analysisA 3-member board of directors of XYZ Ltd. owns 75% shares, while 25% shares are held by individual shareholders. The board arbitrarily denies the minority shareholders access to the company's financial records and meetings. They also divert company funds to their personal businesses without any shareholder approval. Can the minority shareholders approach the National Company Law Tribunal (NCLT) under Section 241 of the Companies Act, 2013, for relief against the directors? What legal remedy would the NCLT likely grant?
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Bhai, I feel corporate oppression is a serious issue in India, khaali karo na? Directors often take decisions against the interest of minority shareholders. Section 397 of the Companies Act, 2013, allows them to file a petition for oppression. But still, there are many cases where directors misuse their powers. We need more strict laws and awareness among shareholders about their rights.