Mumbai: The Bombay high court has to sort out another bitter tussle between promoters and shareholders.
Shree Ram Urban Infrastructure Ltd has approached the high court to resolve a shareholder protest against its proposed issue of convertible warrants. The Company Law Board (CLB) had ruled in favour of the shareholders.
The infrastructure firm’s board had last month proposed issuing 25 million warrants convertible into shares to promoters of Shree Ram Urban Infrastructure. The firm’s promoters are the Kasliwal family of the S Kumars group.
However, the firm’s shareholders, who hold a combined 40% stake, took the matter to CLB proposing a rights issue instead of a preferential allotment, as they feared the warrants would be issued to the promoters, directors, and friends and relatives of the promoter group.
In its petition, Shree Ram has said it urgently needs Rs50 crore and that the promoters would acquire the shares at a price governed by the guidelines of the capital market regulator Securities and Exchange Board of India, or Sebi.
The company said it is apprehensive of a rights issue as several real estate firms have been unsuccessful in raising funds using the route. It said companies such as Housing Development and Infrastructure Ltd, Unitech Ltd and Sobha Developers Ltd too had opted for preferential allotments.
Several minority shareholders of Shree Ram insist they are ready to subscribe to a rights issue. If the issue fails, they would have no objections to a preferential allotment.
The high court has said the company can take a vote in its annual general meeting on 24 June, but that it would take the final call on the matter.