SHC moved against decision of Jahangir Siddiqui Company to pay Rs9m to ‘boss’s son’. DESIGN: FAIZAN DAWOOD
KARACHI:
Sindh High Court on Wednesday heard the plea of minority shareholders of Jahangir Siddiqui Company against irregularities in the grant of bonus and consultation fee to directors.
The single member bench comprising Justice Shafi Siddiqui has linked the issue of approval of bonus and consultation fee to Ali Jahangir Siddiqui during the Annual General Meeting held on April 9, with the outcome of court proceedings.
Barrister Murtaza Wahab on behalf of Asif Manan and others being the minority shareholders in Jahangir Siddiqui Company had moved the court against policies of majority shareholders which they consider detrimental to the interest of the company.
The petitioners making directors of Jahangir Siddiqui Company and SECP as respondents told the court that the directors in capacity as majority shareholders approved Rs9 million payment as consultation fee to Ali Jahangir Siddiqui, son of Jahangir Siddiqui.
The counsel maintained that under no stretch of imagination they (directors) should carry out the agenda which may prejudice the rights and interests of the minority shareholders.
The directors or majority shareholders of the company have limits to their powers. Barrister Wahab relied on the Sakina Khatoon v/s SS Nazir Hussain case wherein it was observed, “it is of course true that if a company is in control of majority shareholders who are abusing their position by defrauding the company, the minority shareholders can institute legal proceedings to bring such a situation to an end.”
Barrister Wahab told the court that the meeting of the company held on Wednesday was meant to approve consultation fee for the eighteen months ending December 31, 2012. The said matter is under investigation of Securities and Exchange Commission of Pakistan (SECP) and the directors of Jahangir Siddiqui Company are trying to cover up the deficiency in such investigation.
Barrister Wahab also told the court that apart from the consultation fee there is another issue of Rs424.9 million bonus approved for the scion of Jahangir Siddiqui.
He said that approval of such a huge amount is detrimental to the interests of the minority shareholders and hence pray for restraining order.
The bench deciced that notice be issued to the defendents and in the meantime the direstos of Jahanigir Siddiqui Company may carry on wih the 22nd Annual Generakl Meeting however decision in rlation to the advisory fee shall be subject to further orders of theis court.
Published in The Express Tribune, April 10th, 2014.
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This is excellent news. Shareholder protection is something which not many companies are following. This is the kind of relief courts should be providing unlike the dark days of the former cjp.