Hindusthan National Glass & Industries (HNG) has clarified that the recent Calcutta High Court order has not stayed the rights issue, as mentioned in an earlier report in Business Standard on August 20, and has permitted the company to take preliminary steps which include passing of the resolutions, making applications before Sebi and other authorities for approval.
It may be recalled that the plaintiffs, Rajendra Kumar Somany and 25 other shareholders of HNG, had filed a suit in the high court seeking an injunction restraining the defendants, including the company, from transacting any business specified in item No 9 and 10 of the notice to the company's annual general meeting scheduled for August 24, 1998. Item No 9 relates to increase in the authorised share capital and item 10 concerns issue of right shares.
The application was moved on August 18 and after hearing both the parties, Justice Ronojit Kumar Mitra passed an interim order in which no restraint was made on the issue of increasing authorised share capital of the company. The court, however, directed the company not to issue the letter of offer or to allot right shares until further orders and has directed the matter to be heard after affidavits.
The company also said the question of regaining wrongful or illegal control over it does not arise since the plaintiffs in the suit hold 40% stake and the C K Somany group holds over 51%