Minosha’s small investors move NCLAT

The minority shareholders of Minosha India Ltd have complained to the National Company Law Appellate Tribunal in New Delhi. They claim that the company unfairly removed them by reducing its capital.

Minosha, previously known as Ricoh India, was declared bankrupt in 2018. It was bought by Kalpraj D Dharamshi and Rekha Jhunjhunwala in 2019. As part of the bankruptcy resolution, the company delisted its shares and reorganized its capital.

After the delisting, the shareholders had no way to trade their shares. The company could have bought back shares from willing shareholders, allowing others to keep their shares. However, the company chose to reduce its capital as approved by the tribunal.

Capital reduction happens when a company decreases its share capital by making payments to shareholders or canceling some shares.

Minosha went to the NCLT in October to reduce its capital from ₹47.9 crore to ₹45.3 crore, proposing a dilution of 5.38% of its share capital.

The company stated that the capital reduction would give the public shareholders a fair chance to exit since their shares were no longer tradable after the delisting in 2019.

This move was opposed by minority shareholders Narendra Singhania and Shubham Singhania, as well as some creditors. They wanted the option to exit the company or maintain their investment. They appealed to the court, saying they were forced to exit by the promoter group, who owned 94.62% of the shares.

The shareholders stated that the proposed reduction was unfair and aimed at getting rid of the public shareholders. They wanted a separate meeting where minority shareholders could have given their consent or opposition to the capital reduction scheme.