CLB invalidates UNI sale to Subhash Chandra firm

Mumbai: The Company Law Board (CLB) has questioned the bona fides of the controversial sale of majority stake in news agency UNI to Subhash Chandra's Essel group and declared the deal as prima facie invalid.

CLB chairman N Balasubramanian ruled that sale of 50.05 per cent shares to Essel Group's Media Vest was prima facie in violation of articles of association of UNI, a non-profit sharing company set up in 1961, and ordered status quo as of date.

No meeting of the reconstituted board of the agency should be held without CLB's permission, he ruled and directed UNI, Chandra and other respondents to file their reply in six weeks. He also posted the matter for March 7 for further hearing. The sale of UNI stake to Chandra was challenged by the Ananda Bazar Patrika group, a shareholder in UNI, who prayed that the UNI board's resolution to enhance the paid-up capital and allotment of shares in favour of Media Vest be made "illegal, null and void".

The petitioner's counsels pointed out that UNI's annual general meeting was kept in the dark about the reconstitution of the board to include Subhash Chandra and his three nominees pursuant to allocation of shares to Media Vest. The issue was not even mentioned in the AGM's agenda and there was no resolution for the appointment of the directors, they said.

A Bhopal eveninger Sandhya Prakash has also challenged the UNI stake sale to Media Vest and the case is now being heard in the Delhi high court.