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In an attempt to avert a hostile takeover bid by a Mumbai-based broker Bharat Patel and his associate investors, Vadodara-based Jyoti Ltd on Monday said that it will follow the legal course of action.
"We will take the highest legal channels to fight against him (Patel). He has violated the very shareholders agreement (SHA) by which he became an investor and then a director of Jyoti Ltd. His voting rights have been suspended and he has been removed as a director of the company," said Rahul Amin, CMD of Jyoti Ltd., a Vadodara-based a turn-key solutions provider with an order book of Rs 600 crore.
Amin said that the legal channels will also include the Company Law Board, among other options.
Patel was removed as a director in a shareholders meeting held on November 10, 2014. Patel has been on the Board of Directors of Jyoti Ltd. since 2010 when he picked up about 11 per cent stake in the company.
Patel along with Mumbai-based Finquest Financial Solutions Pvt Ltd, had issued notice proposing to convene an Extraordinary General Meeting (EGM) on March 17 of shareholders of Jyoti Ltd seeking removal of board of directors including Amin and other directors of the company.
"By making aggressive buying in the company, he (Patel) has violated the shareholder agreement, thereby requiring the regulator's intervention as well," Amin added.
In an official communique, the company said that the promoters, including Amin hold 32.66 per cent in the company, while Patel and his associates allegedly hold over 40 per cent shares. This is a phenomenon called Green Mailing, rampant in foreign countries, but rare in India, the company further stated.
The Jyoti management has alleged Patel of blackmailing the "promoters to pay much higher premium for his holding or get thrown out from the management of the company."
The company also alleged that Patel was found accumulating company's shares in the name of other investors including Mauritius-based Foreign Institutional Investors (FII's) namely Orange Mauritius Investments Ltd. (4.9 per cent) and Hypnos Fund Limited (4.79 per cent). Also, Mumbai-based PAT Financial Consultants and Finquest Financial Solutions, where Patel is chief mentor is reported to have stake about 12 per cent in Jyoti.
Among other things, the investors led by Patel had alleged that the promoters and the directors of the company are working against the interests of the company and its shareholders.
Meanwhile, it needs to be mentioned here that Jyoti Ltd has undergone Corporate Debt Restructuring (CDR) to restructure debt worth Rs 570 crore.
JYOTI ALLEGES BROKER OF BLACKMAILING
- Mumbai-based broker Bharat Patel was removed as a director in a shareholders meeting held on November 10, 2014. He has been on the Board of Directors of Jyoti Ltd. since 2010 when he picked up about 11 per cent stake in the company.
- Patel along with Mumbai-based Finquest Financial Solutions Pvt Ltd, had issued notice proposing to convene an Extraordinary General Meeting (EGM) on March 17 of shareholders of Jyoti Ltd seeking removal of board of directors including Amin and other directors of the company.
