EIH Ltd, the company running the Oberoi chain of hotels, has withdrawn a special resolution pertaining to raise funds through a preferential allotment of ordinary or preference shares following apprehensions expressed by some shareholders.
The counsel of EIH has informed the Bombay High Court, where some shareholders had filed a case challenging the proposed resolution, that the company withdrew it "in order to uphold the principles of good corporate governance."
The resolution, which was proposed to raise funds from the domestic as well as foreign markets for expansion of the company's business and renovation of the existing units, was slated to be tabled before shareholders at the company's annual general meeting on August 21.
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In their communication to chairmen of the Unit Trust of India, Life Insurance Corporation and General Insurance Corporation-the institutions having stake in the company-the shareholders objected the resolution on the ground that the it was a "blatant disregard to the prevailing Sebi Regulations." A copy of the communication was sent to Sebi chairman D R Mehta.
The court has given go-ahead to EIH on other resolutions pertaining to increase in authorised share capital, raising foreign institutional investors