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JUDGMENT A.K. Sikri, J.
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1. Pasupati Fabrics Ltd. (hereinafter called as `the company') was incorporated as a public limited company in the year 1991. Barely within 10 years of its existence, its net worth was fully eroded. It being an industrial company defined under Section 3(e) of Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as `SICA'), it became imperative for it to approach the Board for Industrial and Financial Reconstruction (BIFR) and thus a reference in terms of Section 15(1) of SICA was filed before the BIFR in March, 2001. It was registered as BIFR Case No. 375/2001. The BIFR declared the company as a sick industrial company under Section 3(1)(o) of SICA . The Industrial Development Bank of India (IDBI), its main creditor, was appointed as the operative agency under Section 17(3) of SICA for the purposes of preparing a rehabilitation scheme. The Draft Rehabilitation Scheme (DRS) for the revival of the company was prepared; suggestions/objections were invited to the same; those suggestions and observations received from the concerned parties were considered by the BIFR and ultimately vide order dated 5th February, 2004 the rehabilitation scheme was sanctioned by the BIFR subject to certain modifications.
2. I shall advert to the main provisions of the Sanctioned Scheme (SS) at the appropriate stage. However, it may be pointed out here itself that the SS, inter alia, provides for arrangement with the secured creditors, including the IDBI and also lays down the manner in which they are to be paid. IDBI, like other creditors, had to forgo substantial part of its dues recoverable from the company and the reduced amount is to be paid in a phased manner. Under the SS, IDBI is to be allotted equity shares worth Rs. 23 crores at par. To enable the IDBI to get this equity stakes, the SS provides for restructuring the authorised capital of the company and reduction of equity share by 35% and issue of 0.0001% redeemable preference shares. Provision is also made for purchase of shares, which are to be allotted to IDBI, by promoter (s) of the company. Because of this buy back clause of shares by the promoters, dispute has arisen between Mr. Vijay Kumar Jain and his associate companies on the Page 2461 one hand and Mr. Raj Kumar Jain and his associate companies on the other hand. According to Mr. Vijay Kumar Jain, he is the only promoter, envisaged in the SS, who has right to buy back these shares. On the other hand, case of Mr. Raj Kumar Jain is that the promoters of the company, when it was incorporated in the year 1991, were Mr. Vijay Kumar Jain, Mr. Ramesh Kumar Jain, Mr. Mukesh Kumar Jain and their associates. He and his group companies named in the prospectus being the associates have to be treated as `promoters' and, therefore, this buy back facility is provided to all the promoters in the same ratio in which they are holding the shares in the company. Therefore, the core dispute is as to who are the promoters entitled to buy back the shares which are to be allotted to IDBI.
3. The aforesaid dispute is not to be considered in isolation as certain other incidental issues have also cropped up in the process.
4. Mr. Raj Kumar Jain and his associate companies had filed an application before the BIFR seeking clarification of the SS supplicating the BIFR to spell out in clear terms as to who were the promoters entitled to buy these shares. This application was dismissed by the BIFR vide order dated 6th July, 2005 on the ground of delay, latches and acquiescence. However, few days earlier i.e. on 28th April, 2005 Mr. Raj Kumar Jain and his associate companies filed a company petition under Sections 397/398 of the Companies Act, 1956 (for short `the Act') before the Principal Bench, Company Law Board (CLB) alleging certain acts of oppression and mismanagement by Mr. Vijay Kumar Jain, Chairman and Managing Director of the company. The main grievance was again the same, namely, move of Mr. Vijay Kumar Jain intending to buy back the entire shares allotted to IDBI. It was contended that with this buy back the entire shareholding pattern would go topsy-turvy thereby reducing Mr. Raj Kumar Jain and his associate companies into minority shareholders. Mr. Vijay Kumar Jain contested this application, inter alia, on the ground that the CLB had no jurisdiction to entertain such a petition and determine such a question which fell within the exclusive domain of BIFR, having regard to the provisions of Section 32 of SICA. The CLB has by impugned order dated 24th August, 2005 held that it had the requisite jurisdiction to entertain this petition and the limited issue which the CLB was deciding was not covered by the provisions of SICA, and therefore, provisions of Section 32 of SICA were not attracted. Therefore, the question of jurisdiction of the CLB to entertain the petition under Sections 397/398 of the Act, which was hotly contested, is another issue which requires determination.
5. It may also be noted at this stage that Mr. Raj Kumar Jain and his associate companies had challenged the allotment of shares to IDBI also, inter alia, on the ground that this allotment was made without following the procedure for increasing the authorised share capital of the company and, therefore, the allotment itself was ultra-vires as, on the date of allotment, the company was not having sufficient authorised share capital to enable the company to allot the shares to IDBI. It was also contended that subsequent act could not ratify the otherwise void and ultra-vires action. In the impugned order, the CLB has accepted this plea as well. Challenging this part of the order, IDBI has also filed appeal being Co.A.(SB) No. 20/2005. This is, therefore, yet another issue which has fallen for consideration.
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6. While setting aside the allotment of shares to IDBI and directing the company to allot shares after suitably enhancing the authorised capital by following due procedure, in so far as prayer of Mr. Raj Kumar Jain and his associate companies for their entitlement to purchase the shares of IDBI is concerned, the CLB held that it could not give this direction for which parties were required to approach the BIFR. Mr. Raj Kumar Jain and his associate companies are aggrieved against this direction and their contention is that after holding that they are also the promoters, the CLB should have given consequential direction to IDBI to sell the shares to all the promoters in the ratio in which they are holding shares in the company. Therefore, this part of the CLB's order denying them consequential relief is challenged by Mr. Raj Kumar Jain and his associate companies for which Co.A.(SB) No. 19/2005 is filed.
7. Thus, we have three appeals- one by Mr. Vijay Kumar Jain and his associate companies challenging the order of the CLB, second by the IDBI and third appeal is filed by the associate companies of Mr. Raj Kumar Jain.
8. After stating the scope of these appeals at the outset, it would be necessary now to take stock of the important and material facts.
9. The company was incorporated on 27th November, 1991. For this purpose, public issue of 3,53,90,000 equity shares of Rs. 10/-each for cash at par aggregating Rs. 3539 lacs was initiated. The prospectus which was issued for this purpose had to contain necessary details as required under the Act as well as SEBI Act and SEBI Regulations. As per the capital structure contained therein authorised capital was Rs. 9 crores divided into shares of Rs. 10/- each. 70 equity shares of Rs. 10/- each had already been issued and subscribed, obviously, at the time of incorporation. The issue was for allotment of 73,88,00,700 equity shares of Rs. 10/- each for cash at par and out of the said issue 38,49,00,000 equity shares were reserved for firm allotment i.e. promoters, their friends, relatives and associates. Therefore, the public was offered 35,39,00,000 equity shares . Part-II of the prospectus giving capital structure provided the aforesaid information about the share capital. There were certain notes appended thereto. Note Nos. 2 5 and are as under:
2. Promoters' contribution and Lock in period would be as follows:
No.of shares Date of allotment % of Total paid up Capital after the issue (H) Face Value (Rs.) Issue Price per share (Rs.) Lock in period (years) 70 27.11.91 10 10 Nil 2,00,19,982 To be allotted 27.1 10 10 3 1,84,70,018 To be allotted 25 10 10 5 Total 3,84,90,070 52.1
5. Promoters will hold 52.10% of the post issue capital.
10. Part-V dealt with `Company, Management and Project' and, inter alia, provided `promoters' their background and group companies'. Underneath following description was given:
Page 2463 PFL has been promoted by Shri Vijay Kumar Jain, along with his two brothers S/Shri Ramesh Kumar Jain and Mukesh Kumar Jain and their associates.
Shri Vijay Kumar Jain (47 years), the main promoter, a commerce graduate having 26 years experience, is the Chairman & Managing Director (CMD) of HINDUSTAN BREWERIES & BOTTLING LTD. (HBBL) which is engaged in the manufacture of beer (capacity 50,000 hecto-ltr p.a.) at Thane in Maharashtra. The Company, which was a sick unit when it was taken over by Shri Jain in 1975, has since turned the corner and its brands "BOMBAY PISLNER" and "HAMBURG PILS" have been well established.
Shri Ramesh Kumar Jain, B.Com., (40 years) having 19 years experience is the CMD of PASUPATI SPINNING & WEAVING MILLS LTD. (PSWM), engaged in the manufacture of cotton & synthetic blended yarn at village Kapriwas (Dharuhera) in Haryana with aggregate installed capacity of 39056 spindles (including 12096 spindles in a 100% export oriented cotton spinning unit). PSWM is presently implementing an expansion project by installing an additional 12840 spindles.
Shri Mukesh Kumar Jain, (38 years) an engineering graduate having 17 years experience, is the MD of PASUPATI ACRYLON LTD. (PAL) engaged in the manufacture of acrylic fibre (capacity 15000 tpa) at Thakurdwara, Dist. Moradabad in Uttar Pradesh.
Name of concern Nature of Business Details of Litigation /Date of Incorporation /Activities Undertaken /Labour Problems Etc. ---------------------------------------------------------------------------------------- 1. Hindustan Breweries and Manufacture of Beer Nil Bottling Ltd. (HBBL) 1.12.1970 2. Pasupati Spinning & Weaving Manufacture of cotton Nil Mills Ltd. (PSWML 13.8.1979 and synthetic blended yarn 3. Pasupati Acrylon Ltd. Manufacture of acrylic fibre Nil (PAL) 22.10.1982 4. Pyramid Trading and Trading, Exports and Financing Nil Finance Ltd. (PTFL) 18.2.1985 5. Duroflex Engineering Ltd. Trading and Financing Nil (DEL) 21.3.1985 6. Pasupati Fincap Ltd. Financing Nil (PFCL) 30.12.1993 -----------------------------------------------------------------------------------------
11. It may be noted here itself that the companies mentioned above are the companies of Mr. Vijay Kumar Jain and in none of these companies, Mr. Raj Kumar Jain has any stakes. Submission of Mr. Vijay Kumar Jain was that the places where the companies promoted by/belonging to the promoters Page 2464 are provided, these companies do not include the companies held by Mr. Raj Kumar Jain and, therefore, Mr. Raj Kumar Jain's companies were not the `promoters' and the names of the companies in which Mr. Raj Kumar Jain has the stakes are stated in a different column where the information about the promoters association with these companies is given.
12. The prospectus provided additional information, in this behalf, in the following terms:
Name of concern Nature of Business Details of Litigation /Date of Incorporation /Activities Undertaken /Labour Problems Etc. ----------------------------------------------------------------------------------------- 1. Priyanka Overseas Ltd. Exports Nil (POL) 24.2.1984 2. Dhanad Viniyog & Pratibuti Exports & Financing Nil (P) Ltd. (DVP) 23.11.1993 3. Dhanad Financial Services Exports & Financing Nil (P) Ltd.(DFS) 22.11.1993 4. Wave Inter Trade (P) Trading & Exporting Nil Ltd. (WIT) 23.3.1987 5. Biswanath Industries Ltd. Trading and Financing Nil (BIL) 11.3.1960 6. Toheee Trading & Agencies Tradings Nil (P) Ltd. (TTA) 10.6.1982 7. Pasupati New Tex Ltd. Manufacturing of Fabrics Nil (PNTL) 20.8.1986 8. Pasupati Overseas Pvt. Trading & exporting Nil ltd. (POPL) 13.10.1987 ----------------------------------------------------------------------------------------- 13. These companies include certain companies of Mr. Raj Kumar Jain.
14. When the net worth of the company eroded and reference was made to the BIFR under Section 15(1) of SICA, Form A was filed with the BIFR as per the requirement contained in Regulation 19 of the Regulations framed under SICA. Srl. No. 1 of Section I thereof requires name, designation and address of the informant who informs the BIFR about the sickness of the company. Name of Mr. Vijay Kumar Jain, Chairman & Managing Director of the company is mentioned against this column. Section II which starts with Srl. No. 13 requires information about the promoter. Again, name of Mr. Vijay Kumar Jain alone is mentioned. However, it would be necessary to reproduce the entire information given against Srl. No. 13:
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(b) Share Holding pattern of Amount Paid up Capital % of Aggregate all classes of shares (Rs in Lacs) ------------------------------------------------------------------------------ Promoters & Associates 5192 79.42 Bank & Fis 1267 18.86 Public & Others 79 1.66 NRIs 04 0.06 ------------------------------------------------------------------------------ Total 6542 100.00 ------------------------------------------------------------------------------
15. As already pointed out above, the BIFR vide order dated 26th November, 2002 declared the company as sick industrial company and appointed IDBI as Operating Agency under Section 17(3) of SICA for preparation of the scheme. The DRS was formulated by IDBI for revival of the company which was circulated to all concerned parties for their suggestions/objections. In the DRS, information as on 31st March, 2003 about management and shareholding pattern was given in the following manner:
Shareholding Pattern: (as on March 31,2003)
Amt Total % --------------------------------------------------- Promoters 51.86 0.74 Promoters Associates 5572.57 78.82 Non Resident Indians 4.19 0.06 Mutual Funds 9.99 0.14 FIS bank & Mutual Fund 903.62 12.78 General Public 527.20 7.46 -------- ------ Total 7069.43 100.00 -------- ------
16. After suggestions and observations were received from the concerned parties, BIFR considered the same and ultimately with modifications scheme for revival of the company was sanctioned vide order dated 5th February, 2004. Para 1.1 of the SS under the head `Introduction and Background' gives information about the incorporation of the company in the following words:
"Pasupati Fabrics Limited (PFL) was incorporated on November 27, 1991 was promoted by Shri Vijay Kumar Jain and Associates for setting up a 100% EOU composite textile mill (25,200 spindles, 120 shuttless looms and facilities to process 140 lakh meters of fabric per year) at Nagla Hasanpur, District Mathura in Uttar Pradesh."
17. Management and shareholding pattern was provided in para 2 of the SS. Shareholding pattern was same as given in the DRS. About management, it was stated:
"Management: The Board of PFL comprises of 8 directors with two directors from promoters group and six independent professional directors including a nominee of IDBI. Shri Vijay Kumar Jain, the Chairman & Managing Director Page 2466 and Shri Ramesh Kumar Jain represents promoters group. The other six directors are Shri I.K. Singhal, a textile engineer, who is the Director (Operations), Ms Poonam Manshani, Shri J.S. Varshneya (Ex Chairman PNB, Shri S.S. Dhanoa (IRS Retd.), Dr Mithilesh Kumar Sinha (Former CMD of SBI) and Shri Deepak Gupta (Nominee of IDBI)."
18. The cut off date for the purposes of reliefs and concessions has been fixed as 31st May, 2003. Liability of IDBI, as on that date, was Rs. 7632.41 lakh plust interest. However, as per the SS, the BIFR directed IDBI to accept the entire principal outstanding of Rs. 7632.41 lacs as follows: (a) down payment of Rs. 763.24 lakhs (10% of principal outstanding) within a period of six months as provided therein and (b) balance principal outstanding of Rs. 6869.17 lakhs in 40 quarterly Installments. (c) After giving of down payment of 10%, interest on settlement amount is to be paid to IDBI at the rate of 11% per annum in the manner provided therein. The SS also makes a provision for allotment of equity shares of the company to the tune of Rs. 2300 lakhs in demat form and also lays down the provisions for buying back of the said shares by the promoters. It would be apposite to reproduce this clause in the manner stated in the SS:
"To accept the equity shares of the company of Rs 2300 lakh in demat form only (after writing down of existing equity share capital by 35 %) in part settlement of overdue deferred/funded, simple, compound interest and liquidated damages, on the following conditions.
Promoters to buy back the shares from their own sources in 5th year (Rs.575 lakh), 6th year (Rs.575 lakh) and 7th year (Rs.1150 lakh) at par or market value whichever is higher.
IDBI would also have right to sale the shares in the market with promoters having first right of refusal."
19. SS also provides IDBI to accept 0.0001% redeemable preference shares of Rs. 244.65 lakhs in settlement of written down portion of existing equity holding of IDBI in the company. Balance liability was to be waived of. Waiver clause is in the following terms:
"To waive the entire balance deferred/founded, simpled, compound interest and liquidated damages amounting to about Rs 997.87 lakh (i.e. in excess of Rs 2300 lakh) as on cut off date. However, waivers would be given effect in the books of IDBI subject to company/promoters complying with all the conditions of the rehabilitation scheme."
20. Shares of the company held by investment companies belonging to Mr. Vijay Kumar Jain were also to be pledged with the IDBI and clause in this behalf provides as under:
"To accept pledge of shares of Pasupati Fabrics Limited held by investment companies (i.e. M/s Wave Inter Trade Pvt. Ltd., M/s Pyramid Trading & Finance Ltd., M/s Tohee Trading & Agencies Pvt., Shri Vijay Kumar Jain, CMD with voting rights in favor of IDBI & SBI as an additional security."
21. Provision for arrangement with another secured creditor, namely, State Bank of India (SBI) is also made. It stipulates that the principal amount to be accepted by SBI in the Installments provided therein, interest on the settlement amount Page 2467 which the SBI is to receive. SBI is also to accept zero coupon debentures of Rs. 17 lacs in part settlement. As far as waiver of the balance amount and pledging of shares of the company held by the investment companies of Mr. Vijay Kumar Jain is concerned, identical clauses as in the case of IDBI and reproduced above are provided in the case of SBI also. The SS also makes provision for the settlement of dues of other creditors which had given working capital, namely, UCO Bank and State Bank of Bikaner & Jaipur. Thereafter, the SS deals with promoters/company stipulating various obligations on their part. We may take note of only those provisions which are relevant for our purposes:
(i) Commencing from April 2015 Promoters to agree to bring Rs. 1000 lakh from their own sources in the form of equity share capital/interest free unsecured loans within first three years i.e. Rs. 125 lakh in April 2004, Rs. 437.50 lakh in April 2005 and Rs. 437.50 lakh in April 2006. Unsecured Loans brought in by promoters shall not be withdrawn during the rehabilitation period till the payments to IDBI and SBI is made in full.
(ii) Promoters to agree to pledge their entire shareholding in the company with voting rights to IDBI and SBI on sanction of the scheme.
(iii) Promoters to agree to pledge the shares of the company held by investment companies controlled by Shri Vijay Kumar Jain, CMD (i.e. M/s Wave Inter Trade Pvt. Ltd., M/s Pyramid Trading & Finance Ltd., M/s Tohee Trading & Agencies Pvt. Ltd., and M/s Embassy Finance & Consultants Pvt. Ltd.).
22. Since the existing equity share capital was to be written down by 35% and authorised share capital was to be enhanced to enable the company to issue equity shares to IDBI and there is a procedure prescribed under the Act for reduction of the share capital which, inter alia, includes passing of necessary resolution by the shareholders and sanction to the reduction of the share capital by the High Court, the BIFR on the presumption that such a sanction is to be obtained from the CLB provided in the SS that the CLB to consider exempting the company from the provisions of Sections 81(1), 100, 101, 102 and 103 of the Act for its revival and implementation of terms of the revival package.
23. After sanctioning of the scheme the BIFR directed vide order dated 2nd April, 2004 that the SS be circulated for implementation by all concerned parties. The company on realizing that CLB is not the authority to grant permission about the reduction of share capital and, therefore, it was not necessary to approach the CLB for seeking exemption, moved an application on 21st May, 2004 seeking modifications/rectification in the SS and pleaded for deletion of the clause which required the CLB to consider giving exemption with further prayer that a new clause be incorporated in the SS itself thereby granting such an exemption. IDBI, which was made MA in the SS, also wrote to BIFR on 14th June, 2004 requesting for it to exempt the company from compliance of aforesaid provisions of the Act regarding reduction of the share capital as well as SEBI guidelines to enable it to implement the SS expeditiously.
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24. On 7th July, 2004, the BIFR directed IDBI to pursue with CLB to obtain necessary relief/concessions as envisaged in the SS. However, the company wrote back the BIFR on 10th August, 2004 pointing out that the proposal for the reduction of share capital was to be confirmed by the High Court and not the CLB. Thereafter, even IDBI apprised the BIFR on 17th August, 2004 that it had approached the CLB for this purpose but CLB did not entertain the application on the ground that it does not have power to do so. In this communication, IDBI again requested the BIFR to modify the SS by itself granting necessary exemption.
25. While these requests of the company and IDBI were pending before the BIFR, the company held its 12th Annual General Meeting on 29th November, 2004 in compliance with the terms of the SS and passed the resolution regarding:
(i) increase/reclassification of authorised share capital from Rs. 90,00,00,000/- divided into 9,00,00,000 equity shares of Rs. 10/- each to Rs. 1,00,00,00,000/- divided into 7,50,00,000 equity shares of Rs. 10/- each and 2,50,00,000 0.0001% redeemable preference shars of Rs. 10/- each.
(ii) Reduction of equity share capital by 35% and issue of 0.0001% redeemable preference shares in lieu thereof and
(iii) Issuance of 2,30,00,000 equity shares for the face value of Rs. 23,00,00,000/- to IDBI on preferential basis.
26. Pursuant thereto, Form No. 5 was also filed with the Registrar of Companies (ROC) on 24th December, 2004 relating to the increase in the share capital. The Board of Directors of the company also passed a resolution on 1st January, 2005 for allotting shares worth Rs. 23,00,00,000/- in favor of the IDBI.
27. As no response was received from the BIFR in respect of grant of exemption to the provisions of Sections 81(1), 100, 101, 102 and 103 of the Act and SEBI guidelines, IDBI again requested BIFR on 6th January, 2005 for the necessary modifications in the SS. On this request, the BIFR passed order dated 28th January, 2005 invoking its power under Section 18(2)(f) read with Section 32(1) of SICA and granted exemption to the company from seeking permission from the Department of Company Affairs or SEBI or other authorities and permitted it to proceed Page 2469 with the implementation of the clauses 8 (c) (i) and (ii) and all other provisions of the SS without seeking any further exemptions/permissions. Para 4 of this order reads as under:
"The Board, on consideration of the submissions made by the company and also the recommendations of the MA(IDBI) notes that the rehabilitation scheme sanctioned by the Board on 2.4.2004 aims to ensure long-term viability of the company. Keeping in view the provisions of Section 32(1) of SICA, the Board hereby orders that the provisions of SS 2004, including clauses 8 (c) (i) & (ii) thereof will have the effect notwithstanding anything inconsistent therewith contained in any other law, except the provisions of FERA and Urban Land (Ceiling & Regulation) Act,1976, for the time being in force or in the Memorandum or Article of Association of the industrial company or in any instrument having effect by virtue of any law other than this Act. The company is, accordingly, permitted to proceed with the implementation of the clauses 8 (c) (i) & (ii) and all other provisions of SS- 2004 without seeking any further exemptions/permission from the Department of Company Affairs or SEBI or other authority concerned, so as to revive its status as an ''industrial company'' and make its net worth simultaneously.
Let a copy of this order be circulated to all concerned agencies."
28. The shares were thereafter duly allotted to IDBI and Form No. 2 was also filed with the ROC on 1st March, 2005. On 2nd March, 2005, Form No. 21 was also filed with the ROC intimating reduction of share capital enclosing therewith copies of BIFR's orders dated 5th February and 2nd April, 2004.
29. The allotment of shares to IDBI was challenged by DHNAD Viniyog & Pratibhuti Pvt.Ltd.(respondent No. 2), a company of Mr. Raj Kumar Jain by filing petition under Section 111A of the Act before the CLB. This petition was, however, subsequently withdrawn on 28th April, 2005 . Immediately thereafter, Mr. Raj Kumar Jain and his associate companies filed the petition under Sections 397/398 of the Act before the CLB alleging certain acts of oppression and mismanagement by Mr. Vijay Kumar Jain, Chairman & Managing Director of the company. The respondent No. 2 also filed appeal against the order dated 28th January, 2005 by which the BIFR had granted exemption to the company from seeking permissions, before AAIFR on 11th May, 2005. This appeal is pending before the AAIFR.
30. Mr. Raj Kumar Jain and his associate companies also filed an application before the BIFR on 6th July, 2005 seeking clarification in the order sanctioning the scheme by pointing out that they are also the promoters of the company and, therefore, the IDBI be restrained from transferring the shares allotted to it in terms of SS to Mr. Vijay Kumar Jain. This application was dismissed on 6th July, 2005 on the ground of delay, latches and acquiescence. The operative portion of this order reads as under:
"The Board, on consideration of the facts, merits of the case and materials on record notes that, prior to sanction of the scheme by the board on 2.4.04, the draft revival scheme (DRS) besides being circulated to all the concerned agencies under section 19(1) & 19(2) of the Act by the Board vide its order dated 18.11.03, the gist was also published in the leading newspapers, inviting objection(s)/suggestion(s) from all concerned agencies and the same was/were considered in the mandatory hearing held on 5.2.2004. As no objection was received from the applicant, as stated in para-3 above, in respect of the said DRS within the stipulated time frame the Board hereby rejects the prayer of the applicant."
31. Against this order also, Mr. Raj Kumar Jain has filed the appeal which is pending before the AAIFR.
32. Coming back to the company petition filed by Mr. Raj Kumar Jain and his associate companies under Sections 397/398 of the Act, it may be noted that certain interim orders were passed by the CLB in respect of EGM convened and exercising of voting rights by IDBI which was also modified but it is not necessary to have detailed account thereof. The petition was ultimately heard and culminated into passing of the impugned order dated 24th August, 2005, Page 2470 inter alia, holding that Mr. Vijay Kumar Jain has acted in oppressive manner against Mr. Raj Kumar Jain and his associate companies by denying that they are also the promoters of the company with a view to create a new majority with the right to buy back shares of the company from IDBI and also holding that allotment of shares to IDBI on 1st January, 2005 was ultra-vires the memorandum and as such null and void.
33. Various facets of this order are challenged in these three appeals as already delineated above.
34. The main contention in appeals filed by Mr. Vijay Kumar Jain and his associates as well as IDBI was that the CLB had no jurisdiction at all in the matter inasmuch as the scheme was sanctioned by the BIFR and any dispute arising there from has to be settled by the BIFR and no other court or authority could tress pass into the exclusive domain reserved for the BIFR. This was so stipulated in Section 32 of SICA as well. It was their submission that by passing the impugned order, the CLB had in fact put at naught the entire scheme sanctioned by the BIFR which could not be allowed.
35. The contention of the respondents, on the other hand, was that particular exercise undertaken by the CLB was either covered by the scheme or hit by the provisions of Section 32 of SICA. The respondents did not challenge the jurisdiction of the BIFR in formulating the scheme and also in ensuring the implementation of that scheme. The submission was that the scheme itself provided that IDBI shall sell the shares back to the `promoters'. However, who exactly are the promoters is not stipulated in the scheme. Therefore, when a dispute arises as to who are the promoters, it would be a civil dispute and, therefore, provisions of Section 32 of SICA would not be applicable. According to the respondents, therefore, neither there was an attempt to challenge the SS nor to puncture the said SS. On the contrary, the respondents were enforcing their rights under the SS itself. When the attempt on the part of the appellants was to act contrary to the SS and Mr. Vijay Kumar Jain wanted to buy the shares held by IDBI which had the effect of changing the shareholding pattern and making him majority shareholder, such an act was an act of oppression and mismanagement on the part of Mr. Vijay Kumar Jain and, therefore, the CLB had the power to go into this aspect.
36. In order to appreciate these submissions in their proper perspective, it would be necessary to deal with the legal position relating to jurisdiction of the BIFR under SICA and powers of BIFR vis-a-vis CLB under SICA under the two Acts. It would, in the first instance, be necessary to understand the interplay of two Acts and demarcate the field assigned to the two Statutes.
37. The Indian Companies Act was enacted in the year 1956 almost 30 years before SICA came to be enacted. Even this 1956 Act was not the first legislation on the subject. First Indian Companies Act was enacted in the year 1866 which was replaced by the Act of 1882 and thereafter by the Act of 1913. Thus incorporation of companies was given legislative sanction almost one and half century ago. Although what started as large scale partnerships by means of deed of settlement, the commercial need for general admission of joint stock enterprises became pressing, and it became clear that if the legislature did not act the future development of companies would be an Page 2471 evolution of the unincorporated company, with its cumbrous constitution, its confused legal status and the great disadvantage of merely contractual limitation of liability of members. With statutory enactment, incorporation of registration became compulsory and over a period of time the companies with limited liability became the accepted norm and given legislative sanction. A public limited company thus may comprise large scale of shareholders who subscribe to shares of different denominations and are called members of the company. At the same time, unlike partnership a company is given separate legal entity/status.
38. It is, thus, the shareholders who are the members or `partners' in a company. Since the company is given a legal status and is a legal entity distinct from its shareholders, it has to act in accordance with the provisions laid down under the Act. For day to day governance of this corporate personality, shareholders in the Annual General Meeting appoint/elect the Directors by majority. This democratic principle of governance, namely, corporate democracy, by majority is inherently recognized in the scheme of the Act. Even before the Indian Companies Act, 1956 was enacted, in England, recognition of this rule is founded in the celebrated judgment of Foss v. Harbottle, (1843) 67 E.R.189. The exception carved out in the Act, is when minority shareholders are to be protected and it is provided in Chapter VI dealing with the prevention of oppression and mismanagement (Sections 397-409). The recognized exceptions are: when the act of majority is ultra vires, fraud of minority, acts requiring special majority, wrongdoers in control etc. But for these exceptions, majority rule prevails. Thus a company which is having a successful run, it is the majority shareholders who have a say in the management.
39. However, all the companies may not do business profitably and remain financially robust for all times. They may become sick and acquiring of the sickness may be due to various factors. It may be because of bad governance. It may also be because of other market forces or economic compulsion not within the control of the company. When a company goes sick, i.e. when the liabilities are more than the assets and net worth is eroded, it does not affect the members only. The ill effects of sickness, particularly in industrial companies, are loss of production, loss of employment, loss of revenue to the Central and State Governments and lock in up of investible funds of banks and financial institutions. Therefore, apart from the shareholders/members who had contributed the capital for functioning of a company, the sickness of a company has wide ramification which would be of serious concern to the Government and the society at large. It is, therefore, equally important that when an industrial company becomes sick first attempt has to be made to rehabilitate and restructure such a company. The reason is obvious. Sick industrial companies, when remain sick, result in blockage of sizeable national resources which may have cascading effect on all sectors of economic and social life of the nation. It may, in addition, put the creditors in a spot as it becomes difficult to recover their dues in such an eventuality. This was the reason which prompted the legislature to step in and enact the SICA. SICA operates and is sought to be implemented through a three-tier system, namely, (i) Operating Agency, (ii) the Board, and (iii) the Appellate Authority. The Page 2472 Operating Agency is essentially the hand-tool of the Board to carry out some investigations and legislation provisions. The scheme of the Act visualizes:-
(a) the initiation of a reference and determination by the Board of the sickness of a company;
(b) the enquiry, consideration and determination by the Board whether the sick industrial company can on its own within a reasonable time make its `net worth positive', and if not, then the formulation of a scheme of revival in respect thereof;
(c) the further determination by the Board are due consideration that the hopes of the company are belied and it cannot or has failed to make its net worth positive and, therefore, the permanent sanction of a scheme of revival is necessary. The further consideration is that such a scheme is not practicable or that the financial assistance, concessions and reliefs necessary to make the scheme successful are not forthcoming and, therefore, the formation of an opinion by the Board that it is just and equitable to wind up the company. These are essential jurisdictional parameters of the Board and beyond these it cannot and need not travel. Till the whole exercise is gone through, the jurisdiction and parallel proceedings under all other Acts (to the extent provided in Sections 22 and 23) cannot lie or be proceeded with."
40. The Supreme Court has lucidly outlined the objects of this legislation in the case of Navnit R. Kamani v. R.R. Kamani in the following manner:
"The Statement of Objects and Reasons reveals the purpose underlying the benevolent legislation as also the anxiety of the legislature to provide for preventive, ameliorative and remedial measures essential for reviving sick or potentially sick companies and for ensuring expeditious enforcement of the measures devised by the competent authority under the Act. The Statement of objects and reasons discloses the anxiety of the legislature at the alarming increase in the incidence of sickness of industrial companies and it also reveals that the legislation has been enacted with the end in view to:
1. afford maximum protection of employment:
2. optimise the use of funds of the companies etc.:
3. salvaging the production assets;
4. Realizing the amounts due to the banks etc.; and
5. to replace the existing time-consuming and inadequate machinery by efficient machinery for expeditious determination by a body of experts."
41. The social and economic implications of revival of the sick companies through this legislation were brought out through the following emotional para in this judgment:
Page 2473 "More than a thousand brimming eyes are waiting to replace the tears of despair by tears of relief. No less than 500 thronged workers of a once prosperous industrial unit induced or reduced to "sickness" are on their toes to resort to self-help to restore the lost source of their butter less bread. Their pens are quivering to write a new chapter in the saga of workers' struggle for finding their true "identity" and "dignity". Their dream is coming true with the enlightened and refreshing approach of the Central and State Governments, and the concerned nationalized banks, coupled with prompt, efficient and swift decision-making on the part of the Board for Industrial and Financial Reconstruction and the Industrial Development Bank of India. And with the consensus of all the parties (which is the most heartening feature) who have risen above narrow individual interests by not opposing the workers' scheme in order to promote the larger national interest of reviving the industry, augmenting the national product and providing employment to hundreds of starving workers (three of whom had become martyrs to the cause of committing suicide."
42. The Gujarat High Court in the case of Testeels Ltd. v. Radhaben Ranchhodlal Charitable Trust reported in 1989 (66) Company Cases 555 echoed the same sentiments by highlighting that the purpose of the SICA was to safeguard the economy of the country, to protect viable sick units and revive or to rehabilitate them. Holding that when the reference was pending before the BIFR even proceedings for winding up of such an undertaking before the Company Court will not proceed by making following observations:
"We have already extracted the Statement of Objects and Reasons for enacting the Sick Industrial Companies (Special Provisions) Act,1985. The various provisions which we have extracted in paragraphs supra, amply make out the purpose and the objects sought to be achieved in treating certain companies as sick industrial companies. The financial assistance that can certain institutions may give for any industrial company, which can be had under section 19 of the Act will feel shy to advance any amount when the winding up proceedings are pending. The whole object of the proceedings for winding up is to destroy its corporate existence and the continuance of a pending proceeding for winding up, if allowed by the court in exercise of its discretion, would clearly conflict with the permanent object for which section 16(4) of the Act is enacted."
43. Thus it is clear that with the enactment, precedence was given to the right of the company to make an attempt to get itself revived and in the process creditors right to make recovery was to be put on hold.
44. Once a company goes sick and it makes reference to the BIFR under Section 15 of SICA, which is a mandatory requirement, the BIFR assumes major role thereafter. Its first task is to enquire into the working of such a sick industrial company. Whether it has become a sick industrial company as laid down under Section 16 of SICA? If after such an enquiry the Board is satisfied that the company has become a sick industrial company, the next step is to consider and decide whether it is practicable for such a company to make its net worth exceed the accumulated losses within a reasonable time. If this decision is in the affirmative, it would give such time to the company, Page 2474 as it may deem fit, to make its net worth exceed the accumulated losses. On the other hand, if the decision is that it is not practicable for a sick industrial company to make its net worth exceed the accumulated losses within a reasonable time, but at the same, it is necessary or expedient in the public interest to adopt all any of the measures specified in Section 18 in relation to the said company, it may appoint an Operating Agency and direct it to prepare a scheme for providing such measures in relation to such a company.
45. The main purpose of revival of the company under SICA is not to protect the interest of the shareholders but it is the public interest which comes in forefront. The revival of a company is aimed with main intention to prevent loss of production, loss of employment, loss of revenue to the Central and State Governments and salvage the funds of banks and financial institutions, locked up in the company. Statement of Objects and Reasons does not even mention about the protection of interest of the members/shareholders. It is for this reason the Operating Agency, which is to prepare the scheme is normally a financial institution/investor which has invested the funds in the company. Interest of the shareholders is put to back burner and that of the creditors and workers in the forefront.
46. Section 18(1) of SICA lays down that a scheme to be prepared by the Operating Agency may provide for any one or following measures, namely:
(a) the financial reconstruction of the sick industrial company;]
(b) the proper management of the sick industrial company be change in, or take over of, management of the sick industrial company;
(c) the amalgamation of-
(i) the sick industrial company with any other company; or
(ii) any other company with the sick industrial company;
(hereafter in this section, in the case of sub-clause (i), the other company, and in the case of sub-clause (ii), the sick industrial company, referred to as "transferee company")]
(d) the sale or lease of a party or whole of any industrial undertaking of the sick industrial company;
[(da)] the rationalisation of managerial personnel, supervisory staff and workmen in accordance with law;]
(e) such other preventive, ameliorative and remedial measures as may be appropriate;
(f) such incidental, consequential or supplemental measures as may be necessary or expedient in connection with or for the purposes of the measures specified in clauses (a) to (e).
47. Thus apart from providing financial reconstruction of the sick company, the scheme may provide for proper management and even taking over of the management of a sick company. If necessary, it may provide for amalgamation of the sick company with any other company. A sick company can even be sold or leased out partly or wholly. There can be total revamp of managerial personnel, supervisory staff and workmen. When a company is functioning normally and has not gone sick decisions on all these aspects, as per the Page 2475 provisions of the Act, has to be by the shareholders. This rule in a sick company has been given go-bye. It is the Operating Agency which is now preparing a scheme and providing the measures on the aforesaid aspects. It is the BIFR which is now deciding on these measures after having opinion of the creditors and workers and without any role of the shareholders. In the process, the BIFR may completely change the Board of Directors and appoint new Board of Directors and even alter or amend the Memorandum and Articles of Association. It may even reduce the interest or rights which the shareholders have in the sick industrial company. It is the BIFR which is the sole authority to deliberate on such issues. If the scheme is sanctioned, the binding nature thereof is provided under Sub-Section (8) of Section 18 which reads as under:
"18 (8): On and from the date of the coming into operation of the sanctioned scheme or any provision thereof, the scheme or such provision shall be binding on the sick industrial company and the transferee company or, as the case may be, the other company and also on the shareholders, creditors and guarantors and employees of the said companies."
48. Even if any modification is to be made in a sanctioned scheme or any provisions thereof is to be reviewed, the BIFR is given exclusive jurisdiction as per the provisions of Sub-Section (5) of Section 18 which is to the following effect:
" 18 (5): The Board may on the recommendations of the operating agency or otherwise, review any sanctioned scheme and make such modifications as it may deem fit or may be order in writing direct any operating agency specified in the order, having regard to such guidelines as may be specified in the order, to prepare a fresh scheme providing for such measures as the operating agency may consider necessary"
49. Difficulty in the implementation of the scheme is also to be resolved by the BIFR alone. This power is conferred under Sub-Section (9) of Section 18 which reads as under:
" 18 (9): If any difficulty arises in giving effect to the provisions of the sanctioned scheme, the Board may, on the recommendation of the operating agency [or otherwise], by order do anything, not inconsistent with such provisions, which appears to it to be necessary or expedient for the purpose of removing difficulty."
50. The implementation of the scheme may also be entrusted by the BIFR to any Operating Agency specified in the order while sanctioning the scheme.
51. Thus from the date of registration of reference, there is a complete take over by the BIFR which assumes total control and the company is to function thereafter as per the mandate of the BIFR. It is the BIFR which has to decide how the company is to be rehabilitated and sanction the scheme, which would be a package deal, for operation of the functioning of such a company. The company has to thereafter function as per the provisions of the scheme sanctioned. As noted above, these provisions may provide for the complete take over by the new management, new Board of Directors, new constitution of the company with altered Memorandum and Articles of Association and even reduction of the interest or rights of the existing shareholders and Page 2476 allotment of shares of such a company to some other persons, particularly the creditors. For providing such measures in the sanctioned scheme, procedural requirements contained in the Act, which are to be generally followed when the company is not sick, are not to be gone into. It is manifest from Sub-Section (7) of Section 18 which makes this declaration specifically as would be clear from reading of this provisions which is as under:
"18 (7): The sanction accorded by the Board under sub-section (5) shall be conclusive evidence that all the requirements of this scheme relating to the reconstruction or amalgamation, or any other measure specified therein have been complied with and a copy of the sanctioned scheme certified in writing by an officer of the Board to be a true copy thereof, shall, in all legal proceedings (whether in appeal or otherwise) be admitted as evidence."
52. In order to ensure that the scheme is properly implemented by all those on whom the obligation is cast, Section 33, inter alia, provides that whoever violates the provisions of such a scheme, can be punished with simple imprisonment for a term which may extend to three years and shall also be liable to fine. There is a provision for statutory appeal against the order of the BIFR contained in Section 25 of SICA as per which any person aggrieved by the order of the BIFR, may prefer an appeal to the Appellate Authority. No other court has jurisdiction to deal with the matter and Section 26 of SICA bars such jurisdiction. It reads:
"26. Bar of jurisdiction- No order passed or proposal made under this Act shall be appealable except as provided therein and no civil court shall have jurisdiction in respect of any matter which the Appellate Authority or the Board is empowered by, or under, this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act."
53. With the aforesaid backdrop and scheme of the SICA, let us note the provisions of Section 32 of SICA, subject matter of debate in these appeals. This Section contains the a non obstante clause giving over-riding effect to the provisions of the SICA against any law except the provisions of Foreign Exchange Regulation Act, 1973 and Urban Land (Ceiling and Regulation) Act, 1976. This Section is in the following terms:
"32. Effect of the Act on other laws.-(1) The provisions of this Act and of any rules or schemes made there under shall have effect notwithstanding anything inconsistent therewith contained in any other law except the provisions of the Foreign Exchange Regulation Act, 1973 (46 of 1973) and the Urban Land (Ceiling and Regulation) Act, 1976 (33 of 1976) for the time being in force or in the Memorandum of Articles of Association of an industrial company or in any other instrument having effect by virtue of any law other than this Act.
(2) Where there has been under any scheme under this Act an amalgamation of a sick industrial company with another company, the provisions of Section 72A of the Income-Tax Act, 1961 (43 of 1961) shall, subject to the modifications that the power of the Central Government under that section may be exercised by the Board without the Central Page 2477 Government under that Section may be exercised by the Board without any recommendation by the specified authority referred to in that section, apply in relation to such amalgamation as they apply in relation to the amalgamation of a company owning an industrial undertaking with another company."
54. Once the legal position and scope of the two Acts is understood in the manner explained above, the irresistible conclusion would be that for all matters relating to the SS, it is the BIFR alone which shall have the jurisdiction. Notwithstanding, attempt is made by learned senior counsel for Mr. Raj Kumar Jain to contend that issues raised could be dealt with by the CLB. The grievance of Mr. Raj Kumar Jain in petition filed under Sections 397/398 of the Act before the CLB was two-fold:
(a) The allotment of shares to IDBI has to be only after increasing the authorised capital in the Memorandum and Articles of Association and decreasing the share capital of the existing shares after following the procedures contained in the Act. According to him, as this procedure was not followed and there was no sufficient authorised capital on the date of allotment of shares to IDBI, the act of allotment was ultra vires.
(b) As the SS provided for buying back the shares allotted to IDBI by the promoters, his group companies were the `promoters' and, therefore, entitled to buy back those shares along with other promoters in the ratio in which all these promoters had their shareholding in the company.
55. Whether for this purpose it was necessary for him to approach the BIFR alone or CLB also had the necessary jurisdiction to deal with these issues is the question to be resolved and in the process it is necessary to interpret the scope of Section 32 of the SICA.
56. Before embarking on this inquiry, I may point out that the following legal position was even conceded by the learned senior counsel appearing for Mr. Raj Kumar Jain:
(a) The scheme sanctioned by the BIFR could not be challenged and was not challenged by Mr. Raj Kumar Jain. The respondent was proceeding on the basis that SS had to be implemented.
(b) Since the SS stipulates allotment of shares worth Rs. 23 crores to IDBI, even this was not questioned by Mr. Raj Kumar Jain. However, the submission was that this allotment has to be as per the provisions of the Act and after following the procedures laid down therein.
57. Mr. C.A.Sundaram, learned senior counsel appearing for Mr. Raj Kumar Jain, however, submitted that the SS itself has provided for buy back of shares allotted to IDBI by the promoters. However, it has not specifically defined who the `promoters' are . Who is a promoter would be a question of fact and, therefore, it becomes a civil dispute. Adjudication of this dispute would be outside the scope of implementation of the scheme. BIFR's jurisdiction was only to see as to whether the company was sick and could be revived. Once the scheme was sanctioned and it was not stated in the said scheme as to whom the shares are to be sold, this issue needed to be decided and the CLB had the necessary jurisdiction to decide this issue, more so when threatened Page 2478 action of Mr. Vijay Kumar Jain in seeking to purchase the entire shareholding from IDBI in his own name had the hue of oppression and mismanagement.
58. Learned senior counsel for the appellants, on the other hand, submitted that the expression `promoter' was clearly defined in the scheme and as per the scheme it was only Mr. Vijay Kumar Jain who was treated as the promoter; reading of the entire scheme would make it clear that IDBI was to sell the shares to Mr. Vijay Kumar Jain and in any case, as the scheme provided buying back of shares from IDBI to the promoters and if there was any dispute regarding the entitlement to buy back those shares, it related to implementation of the scheme and only BIFR could decide this issue.
59. As the maintainability of the petition under Sections 397/398 of the Act before the CLB depends on determination as to whether it is the BIFR who had the exclusive jurisdiction to deal with the matter or CLB could carve out a niche for itself and decide the issue raised before if.
Re: Promoters
60. I am of the view that when in a SS there `promoter' is mentioned and if the dispute arises as to who is the `promoter' and implementation of the scheme depends on this determination, it would be for the BIFR to clarify and decide the same.
61. I have already pointed out, in the earlier parts of the judgment, various documents where the expression "promoter (s)" has occurred. Against the column relating to `promoter' only name of Mr. Vijay Kumar Jain is mentioned. It was the submission of learned senior counsel for Mr. Vijay Kumar Jain that the expression `promoter' shall have different connotation in different legislation. For incorporation of the company, `promoter' may have one meaning. The word `promoter' was not defined in the Act and Section 62(6) gives a very restrictive definition and reads as under:
"62 (6) For the purposes of this section-
(a) the expression "promoter" means a promoter who was a party to the preparation of the prospectus or of the portion thereof containing the untrue statement, but does not include any person by reason of his acting in a professional capacity for persons engaged in procuring the formation of the company;"
62. For the purpose of SEBI Regulations, promoter is given a very wide meaning as would be clear from Section 2(h) of the SEBI Act. It was argued that for the purpose of SICA promoter shall have yet another connotation and he would be a person responsible to carry out the scheme. It is for this reason Form A as well as draft scheme contained a column about the name of the promoter and the person who is making an application and assumes responsibility to co-operate for framing the scheme of rehabilitation would be the promoter. Therefore, the submission was that the expression `promoter' contained in the SS would have no relevance with the persons who were the promoters at the time of incorporation of the company and it was necessary to look into only the proceedings before BIFR to find out as to who were the promoters mentioned therein. Attempt was also made to show that Mr. Raj Kumar Jain and his associate companies were not even promoters at the time of Page 2479 incorporation of the company. It was argued that Mr. Vijay Kumar Jain was disclosed as a promoter was within the knowledge of Mr. Raj Kumar Jain and his associate companies and from very beginning they were taken into confidence even at the time of preparing the draft scheme of rehabilitation.
63. On the other hand, as already noted above, from the various documents relied upon by Mr. Sundaram, his endeavor was to establish that Mr. Raj Kumar and his associate companies were the promoters.
64. In the aforesaid background, it is for the BIFR to see as to who were the promoters in its contemplation when the scheme was sanctioned. Whether the BIFR proceeded on the basis that the expression `promoter' used in the proceedings before it and in the SS has reference to those persons who were the promoters at the time of sanction of the scheme or the BIFR was referring to the person who disclosed himself as promoter in Form A and draft scheme. Obviously, since this clarification is required, it is for the BIFR to give such a clarification more so when specific provision, as noted above, is contained in SICA itself.
65. Matter can be looked into from another angle as well. The BIFR has made provision for allotment of shares to IDBI and for sale of those shares by IDBI to promoters in future. Thus allotment of shares in the first instance to IDBI and buy back of those shares from IDBI is part of the scheme. While implementing the scheme, if any difficulty arises, it is for the BIFR to remove that difficulty and for this reason also the appropriate authority would be BIFR.
66. There is yet another aspect of this issue. Even if the BIFR is of the opinion that in its contemplation `promoter' was the one whose name is disclosed in Form A as well as in sanctioned scheme viz. Mr. Vijay Kumar Jain, and the other group wants a change, still it is the BIFR only which has the power to modify or amend the scheme. It is the BIFR which can treat Mr. Raj Kumar Jain and his associate companies also as promoters once the BIFR is convinced that Mr. Vijay Kumar Jain is trying to take undue advantage by purchasing the entire shareholding from IDBI and thereby trying to gain control over the company. Thus relief, even in that eventuality, can be granted by the BIFR.
67. For all these reasons, it would be appropriate to approach the BIFR. The respondents, in fact, had approached the BIFR. The BIFR dismissed the application vide order dated 6th July, 2005. Against this, appeal was also filed by the respondents which was pending at the time when the impugned order was passed by CLB and present petition was filed. It is the proper course, in the facts of this case and in my opinion the CLB had no jurisdiction to deal with this issue inasmuch as issue to be determined is the one arising out of the SS over which the BIFR has the exclusive jurisdiction. Provisions of Section 32 of SICA would, therefore, clearly become applicable. I do not agree with the respondents that the issue as to who are the promoters can be detached from SS and, therefore, is a civil dispute and can be decided by the CLB. This is an ingenuous plea raised by learned senior counsel for the respondents and goes contrary to what is observed above.
Page 2480
68. The CLB while holding that the petition filed by the respondents herein under Sections 397/398 of the Act was maintainable quoted certain passages from the judgment of Mewar Sugar Mills Ltd. v. Chairman, Central Board of Direct Taxes and Anr. reported as 1998 VI AD(DELHI) 309 and also relied upon Union of India v. Krishna Mills Ltd. 81 CC 50 Rajasthan as well as National Organic Chemical Industries Ltd. v. Nocil Employees Union 2005 67 CLA 145. Relying upon these judgments, the CLB observed that it was held therein that the non-obstante clause contained in Sub-Section (1) of Section 32 of SICA does not give the SICA a blanket over-riding effect on all other laws; the over-riding effect is given to the provisions of SICA, rules of schemes made there under only to the extent of inconsistency therewith contained any other law excepting a few exceptions enumerated therein. There is no quarrel about the legal proposition. However, what is to be seen is as to whether the question to be determined is the one covered by the provisions of SICA and falls within the exclusive domain of BIFR. If that be so, the non-obstante clause contained in Section 32(1) of SICA would become applicable. Reliance on National Organic Chemical Industries (supra) by the CLB was totally out of context. Admittedly, in that judgment the Bombay High Court was considering Section 32 of SICA vis-a-vis Sections 391-394 of the Act. Sections 391-394 of the Act deal with scheme of reconstruction, rehabilitation etc. The Bombay High Court was of of the view that Sections 15 to 19 of the SICA provided for a scheme where a company which had become sick can register itself with the BIFR and the BIFR could provide for a package for rehabilitation of the company and/or make the company viable. Similarly, Sections 391-394 of the Act provide for rearrangement of the company's business by way of granting amalgamation, demerger and /or sanctioning of the scheme of compromise. Therefore, observed the court, that provisions of SICA as well as Sections 391-394 of the Act cover the same subject, namely, revival of the company though they provide different methods of doing so and, therefore, they were not inconsistent with each other. However, the CLB is wrong in holding that this principle shall be applicable even to a proceeding under Sections 397/398. No reasons for jumping to this conclusion are given and I fail to understand how the CLB could arrive at such a conclusion. Sections 397/398 deal with mismanagement and oppression, namely, section of the shareholder which is aggrieved by oppressive act of the other group of shareholders can approach the court against such oppression or in case there are acts of mismanagement, that can be complained of . However, once allegation is that this act of oppression flows from the scheme, namely, acts of non-implementation of the scheme sanctioned by the BIFR, one will have to approach the BIFR as in essence what is complained is that the scheme is not properly implemented.
69. Similarly, the CLB was wrong in rejecting the contention of the appellants herein that merely because the BIFR had rejected the application of the respondents for clarification on the ground of delay and latches and not on merits, the CLB could go into that question. It is a curious way of assuming jurisdiction. Once it is held that it is the BIFR which could issue such a clarification and application was also filed before the BIFR, if the grievance is that the said application is wongly dismissed Page 2481 on the ground of delay and latches, the appropriate remedy is to challenge the order. This step, in fact, has been taken by the respondents herein and appeal has been filed.
70. As I am of the opinion that this particular aspect can be considered by the BIFR, it may not be proper for me to decide as to whether Mr. Raj Kumar Jain and his associate companies can be treated as promoters. These are the appeals against the order passed by the CLB. If the CLB had no jurisdiction to examine this aspect as held by him, further enquiry as to whether Mr. Raj Kumar Jain and his associate companies were the promoters or not should not be gone into by me in these proceedings.
71. No doubt the grievance of the respondents herein is that by not accepting the respondents as the `promoters' and not allowing them to purchase the shares from IDBI along with Mr. Vijay Kumar Jain, Mr. Vijay Kumar Jain is trying to gain control over majority of shareholders. It is for the respondents to urge this issue before the Appellate Authority and contend that the BIFR should not have dismissed the application on delay and latches but decided the same on merits.
Re: Allotment of shares to IDBI
72. The CLB had decided that allotment of shares to IDBI is ultra vires its Memorandum and Articles of Association. Indubitably, share allotment to IDBI is in pursuance to the scheme. Mr. Sundaram, learned senior counsel appearing for the respondents conceded that once such a scheme is sanctioned as per which shares are to be allotted to IDBI, it is not open either for the BIFR or shareholders to deny the said allotment. However, his argument was that it should be done only after following the procedure contained in the Act. His submission was that without increasing the authority share capital shares could not be allotted and, therefore, this act is ultra vires the Memorandum and Articles of Association. Likewise, for reduction of share capital of the members as mandated by the BIFR, proper procedure contained in Sections 100-103 of the Act should have been followed. The CLB has accepted this plea.
73. However, what is to be noted is that the CLB had, on applications made by the company as well as IDBI, passed order dated 28th January, 2005 exempting the company from the applicability of the provisions of Sections 81(1), 100-103 and other provisions of the Act/SEBI guidelines. The effect of exemption of these provisions would be that no such procedure is to be followed. Learned senior counsel for the appellants herein had argued that once the scheme had directed reduction of share capital as well as allotment of shares to IDBI, such mandate had to be followed and in order to ensure that these steps are taken, the BIFR could give exemptions from the provisions of aforesaid Sections of the Act. Otherwise, the shareholders could by not approving the proposal for reduction of share capital enhancing the authorised share capital in the Memorandum and Articles of Association and allotment to IDBI, negate the very scheme sanctioned by the BIFR. Again, since the respondents herein had filed an appeal against the order dated 28th January, 2005 granting the aforesaid exemptions and vide order dated 7th September, 2005 the said appeal has been allowed on the ground that the respondents Page 2482 herein should also have been heard before granting such an exemption. The case is accordingly remanded back to the BIFR for passing an order in accordance with the provisions of the SICA and after serving notice and giving opportunity of hearing to all necessary and proper parties before the Appellate Authority. It would be appropriate that this matter is also decided by the BIFR.
74. It may, however, be pointed out that the CLB passed the order keeping in view that there was such an exemption given by the BIFR to the aforesaid provisions. Notwithstanding these exemptions, the CLB concluded that the allotment of shares to IDBI is ultra vires the Memorandum and Articles of Association. In the face of such an exemption, this finding of the CLB is unsustainable. While sanctioning the scheme vide order dated 2nd April, 2005, the BIFR, in respect of IDBI, inter alia, provided as under:
(a) `To accept the entire principal outstanding of Rs. 7632.41 lacs as follows'.
(b) `To receive interest on settlement amount at the rate of @ 11% p.a. In the following manner'.
(c) `To accept the equity shares of the company of Rs. 2300 lakh in demat from only (after writing down of existing equity share capital by 35%)....'
75. It is clear from the above that the expression `to accept' is in mandatory form and amounts to a direction given by the BIFR in the scheme. Same terminology is used for dealing with other secured creditor, namely, State Bank of India. Needless to mention what is approved by the BIFR is the sanctioned scheme of rehabilitation. Different provisions are made as to how this scheme is to be implemented. Action to be taken for implementation thereof would be in the nature of direction. Otherwise, the scheme can be punctured by any of these parties by not agreeing thereto. There is no scope of any discretion in the matter.
76. However, while sanctioning the scheme, the BIFR observed that in so far as provisions of Sections 81(1) and 100-103 are concerned, the CLB may consider exempting the company from these provisions. This observation in the scheme was superfluous inasmuch as admittedly the CLB has no jurisdiction in the matter. Such an exemption, if at all, can be granted by the High Court under the provisions of the Act. The question is as to whether the BIFR can itself grant such an exemption? Answer has to be in the affirmative if this step is necessitated for proper implementation of the scheme. It is stated at the cost of repetition that the scheme in no uncertain terms directed exiting equity shareholders to write down the present equity share holding in the company; mandated IDBI to accept equity shares worth Rs. 2300 lacs and for this purpose to enhance authorised share capital by amending the Memorandum and Articles of Association. It is also accepted position that it may not be permissible for existing shareholders not to write down their equity share holding in the company or not to increase the authorised share capital. Page 2483 Likewise, IDBI is also under obligation to accept the equity shares of the company in the sum of Rs. 2300 lacs and as necessary corollary company has no choice but to allot these shares to IDBI. If that is the legal position, in order to give effect to these provisions the BIFR could adopt one of the following modes:
(a) requiring the company and its shareholders to undertake the steps for relocation for the aforesaid purpose which means convening of meeting of the shareholders approving writing down the share capital and increasing authorised share capital by amending Memorandum and Articles of Association, meeting of the Board of Directors taking such a decision and applying to the High Court for reduction of the share capital.
(b) since the aforesaid steps would be mere formality, in order to give effect to the scheme exempt the company from these provisions once pointed by the company as well as IDBI that provision in the sanctioned scheme asking CLB to consider exempting the company from provisions of Sections 81(1), 100, 101, 102 and 103 of the Act was not needed and the BIFR realised it, there is nothing to prevent BIFR from passing such an order.
77. In fact principle No. (3) laid down by the Division Bench of this court in Mewar Sugar Mills Ltd. (supra) confirms this legal position.
78. However, as pointed out above, although there is a power but whether such a power should have been exercised in the facts of the present case or not is not for me to comment upon inasmuch as the Appellate Authority has remanded the case back to the BIFR for fresh decision on this issue after hearing the respondents herein.
79. I have dealt with the matter only from limited angle, namely, once such an exemption is granted it cannot said that still procedure should have been followed under Sections 81(1), 100, 101, 102 and 103 of the Act and without there being an amendment in the clause relating to authorised share in the Memorandum and Articles of Association, it would be ultra vires. I also do not agree with the CLB that doctrine of relation back would not be applicable. When the permission for exemption was given on 28th January, 2005 in the circumstances explained above, it has to be deemed that this was the provision in the original scheme and, therefore, doctrine of relation back would apply.
80. Therefore, I am of the opinion that the CLB had no jurisdiction to entertain the petition under Sections 397/398 of the Act to deal with the issues which related to SS and are within the exclusive domain of the BIFR.
81. In this conspectus, Co.A.(SB) No. 18/2005 and Co.A.(SB) No. 20/2005 are allowed and the impugned order passed by the CLB is hereby quashed and Co.A.(SB) No. 19/2005 is dismissed.
82. There shall, however, be no orders as to costs.


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Be sure to check out the Legislation page to see the 2016 Legislative Priorities!
MDHA Legislative Update July 2016
MDHA had a very successful legislative session. Three of the four issues we lobbied on passed.
1. Adult dental Medicaid was added to the state budget and the amended state plan from last year was approved by the Center for Medicare and Medicaid. So, funding will be available for adults who qualify for Medicaid starting from January 1, 2016. Debridement, dental prophylaxis and periodontal maintenance will not need special approval. Scaling and root planing will need prior authorization for coverage.
2. The telehealth/teledentistry bill was amended to SB 579 and passed the House and Senate. It includes dental hygienists as providers under the supervision of a dentist. The bill was signed by the Governor. Here is a copy of the truly agreed to bill: http://www.senate.mo.gov/16info/pdf-bill/tat/SB579.pdf Note that MDHA Legislative Council member, Tiffany Grant, RDH, has been invited to participate in MDA's Teledentistry Committee. Her employer, Dr. Nathan Suter is the Committee Chairperson.
3. Both HB 1713 and HB 1717, the original fluoride withdrawal notification bill, passed both the House and Senate with the language that requires an entity to notify consumers if fluoride is being proposed to be taken out of a local water supply. Rep. Donna Lichtenegger, an MDHA member and state legislator, sponsored HB 1717. Here is the truly agreed to bill, HB 1713: http://www.house.mo.gov/billtracking/bills161/billpdf/truly/HB1713T.PDF (Often other bills get the language from an original bill so that is what happened here).
4. HB 2017, our Extended Access bill, was voted out of the House Registration and Licensing Committee on April 5, 2016 with a vote of 15-0. When the bill went to the Select Committee on General Laws and ready for a vote on April 12th, it was stalled so it did not move forward. There was a lot of pressure from the MDA to create language so the dentist would have to diagnose a patient's condition before a dental hygienist can see the patient. There was nothing to prohibit this from being in the Extended Access Agreement with a dentist. MDHA will seek reintroduction of the bill next year.
5. Please start paying attention to the state elections and determine who your state legislators will be after the November election.
6. Note that the next MDHA Lobby Day is Feb. 8, 2017. Save the date notices were already sent out to the dental hygiene schools and is on the MDHA website. There will be a discount for those who sign up for the 2017 by the end of the MDHA Annual Session.
Please contact Diann Bomkamp, RDH at email@example.com if you have any questions.

subset: commoncrawl


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Follow the Money—to Prison
Sanjay Kumar, the former chief executive of Computer Associates (now known as CA) faced a federal judge on Nov. 2 and was sentenced to 12 years in prison for his part in the massive accounting fraud at the software maker. But in many important respects, Kumar's crimes and the lies upon which they were built played a secondary role in the court's assessment.
The sentencing process for white-collar criminals today has as much to do with money, i.e., investor losses, as with other factors such as remorse, community standing, or prospects for rehabilitation. Under guidelines adopted in the post-Enron crackdown, the amount of financial havoc wreaked by a rogue executive figures prominently into his or her sentence. Moreover, when the fraud stretches into the billions, as at Enron, Worldcom, and HealthSouth (HLS), the sentences rise to a duration that makes many legal experts question whether the justice system is shifting the role of deterrence into the realm of overkill.
For example, the 81-year-old founder of Adelphia Communications, John Rigas, faced 215 years in prison under the sentencing guidelines for his role in looting the cable operator. Rigas and his family took more than $2.3 billion in unreported loans from Adelphia coffers, according to prosecutors. In June, 2005, a federal judge sentenced him to 15 years, telling Rigas the punishment would have been far harsher if not for his age and poor health. "One shrinks from, no matter how horrendous the crime, the prospect of someone dying in a prison hospital," U.S. District Judge Leonard Sand said at Rigas's sentencing, according to Bloomberg News.
Scattershot Approach
The former Enron boss, Jeffrey Skilling, has been sentenced to more than 24 years and must pay $45 million restitution. Worldcom chief Bernard Ebbers began serving his 25-year stint in September at a federal prison in Louisiana. The former high school basketball coach was convicted for helping engineer the $11 billion fraud at the telecom, still the largest in the modern era of accounting scandals. Tyco's (TYC) former chief, L. Dennis Kozlowski, is serving at least eight years, and possibly as much as 25, in upstate New York, after being found guilty of taking more than $400 million in company money for his personal use.
"In some cases, you might as well just write a bunch of numbers on a dart board, turn your back and throw a dart at it to come up with some of these numbers," says Daniel Reidy, a white-collar defense attorney at Jones, Day in Chicago and a former federal prosecutor.
That's why legal experts contend that, in many cases, sentencing guidelines drive defendants' choices, regardless of the facts. A loss at trial can lead to a draconian sentence that a plea agreement can avoid. Their poster child could well be Jamie Olis, an accountant in the tax department at Dynegy (DYN), the Houston energy producer. Olis was charged with wire, securities, and mail fraud for his part in a 2001 trading and financing scheme called Project Alpha that helped Dynegy fraudulently boost its cash flow by $300 million. Olis decided to stand trial and lost in 2003. His punishment? An astonishing 24 years, which raised eyebrows nationwide, even outside legal circles.
Taking "Full Responsibility"
"A problem with the sentencing guidelines in fraud cases is that they get ratcheted up with the amount of losses to the exclusion of other factors that are also relevant to the sentencing," says Gary Naftalis, a prominent Manhattan defense attorney. He also notes that the size of the loss is attached to all guilty defendants associated with the loss, not just principal players. In the Dynegy case, people closer to the fraud decided to cooperate with the government probe, pleaded guilty, and ended up with sentences of 15 months or less. A federal appeals court later deemed Olis' sentence excessive and in September the trial court reduced it to six years.
Kumar, the Sri Lankan native who rose to become president and chief executive of Computer Associates (CA), pleaded guilty in April to charges of securities fraud and obstruction of justice for his role in the $2.2 billion fraud at the software maker. At federal court in Brooklyn, N.Y., Kumar told U.S. District Judge Leo Glasser that he took "full responsibility" for his actions in the fraud. "I know that I was wrong, and there's no excuse for my conduct," he said, according to Dow Jones Newswires.
Besides the prison term, he also was ordered to pay an $8 million fine. Kumar pleaded guilty to helping backdate sales contracts to book revenue in so-called "35-day months" so the Islandia (N.Y.) company would meet its quarterly earnings estimates. When regulators began investigating Computer Associates' accounting practices, Kumar allegedly lied and tried to conceal the fraud. The company paid $225 million into a "restitution fund" for harmed investors to avoid prosecution. It also overhauled its leadership team.
Kumar's former employer declined to comment Nov. 2 on the sentencing beyond a previous statement. That said, the company is "a dramatically different organization than we were two years ago, when Mr. Kumar left."


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Sergio Martinez workout
Photos and story by Ricardo Conde
WBC middleweight champion Sergio "Maravilla" Martinez (45-2-2, 24 KOs) of Argentina, now residing in Oxnard, CA, began preparations this week at the World Crown Sports Training Center for his next bout. Martinez will step back into the ring on Saturday November 20th in a rematch against former two-time welterweight champion Paul "The Punisher" Williams (39-1, 27 KOs) at the Boardwalk Hall in Atlantic City, NJ, which will be shown live on HBO's 'World Championship Boxing'.
These two fighters engaged in an exciting back and forth action bout last year, in which many considered to be "Fight of the Year", that ended in a controversial loss for Martinez. Martinez then went on to claim the WBC/WBO middleweight titles from the then reigning middleweight champion Kelly "The Ghost" Pavlik (36-2, 32 KOs) via unanimous decision this past April in Atlantic City, NJ. Martinez was then stripped of his WBO title, due to one of the organization's rules, less than 2 months after having defeated Pavlik.


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More than ever before, people care passionately about their food: its origin, ingredients, preparation and serving. Tomorrow's leaders in the culinary industry need to be more than gifted chefs. They need to be ready to lead their teams, organizations and companies in advancements in culinary direction, new product development and menu innovation. They also need to be skilled in anticipating changing consumer palates and lifestyles and managing diverse employees. It was for these reasons The Culinary Institute of America (CIA) and Hormel Foods (NYSE: HRL) developed the Culinary Enrichment and Innovation Program (CEIP).
This week, members of the CEIP Class of 2012 are gathering for their fourth and final session at the CIA Greystone campus in Napa Valley, Calif. Their focus is menu research and development: the collaborative process of culinary arts, food science, consumer behavior and management. Final presentations to a professional panel will integrate the teachings of the entire program, from global flavors to the ethical responsibilities of healthful, flavorful food preparation, to innovation and leadership.
"The chef is becoming the crystallizing force in culinary R&D," said Dr. Chris Loss, Ph.D., A.O.S. and director of menu research and development at the CIA. Historically, the R&D process was very linear, with a product moving from one expert in isolation to another. Cross-disciplinary, collaborative teams, often with a chef at the center, have proven to be more effective and efficient, resulting in more successful, longer lasting products.
The intensive four-session, 18-month CEIP program brings classes of leadership-focused chefs together for three days every six months on one of the CIA campuses. The chefs work one-on-one with some of the country's finest culinary teachers and managers, chefs and industry thought leaders, many of whom are instrumental in changing culinary paradigms. There is no comparable culinary management program available in the industry.
"These up-and-coming commercial and non-commercial chefs need to learn how to think in new ways, integrating key knowledge and layering in philosophies of inspired management and innovation," said David Kamen, PC III, CHE, CIA Consulting, and CEIP program director.
For the elite CEIP chefs – who come from lodging, restaurant, college and university and health care settings – this final session began with presentations from leading University of California Davis researchers on emerging issues for consumers related to culture and food, as well as consumer perceptions of the food industry. The chefs will then move through the stage gate development process, creating menu item protocepts for a new protein product that has yet to be introduced to the marketplace. They will work collaboratively in groups to determine price point, flavor profile, menu applications, service, menu copy and recipe "story" for their customers. Finally, the chefs will work to develop their menu items for presentation.
During the process, the chefs will recall their conversations on innovation with Chef Eli Kaimeh of Per Se, Chef Ben Pollinger of Oceana, Chef Michael Anthony of Grammercy Tavern and Chef Marcus Gleadow-Ware of Aureole. They will implement lessons learned on leadership from their discussion with John Doherty, former executive chef at the Waldorf Astoria, and remember their visits with New York's Hudson Valley organic farmers on the topics of dedication and purpose.
"The knowledge I've gained from this experience, from our work at the CIA, from meeting these renowned chefs and working side-by-side with my classmates has been personally inspiring and has provided me a level of management training it would take me years to match," said Ida Shen, assistant director and executive chef, University of California Berkeley.
"My work is often outside the scope of the kitchen," said Christopher Culp, manager of Food and Beverage Concepts and Innovation, InterContinental Hotels Group. "My education was as a chef, but this program expanded my knowledge of how to approach challenging management issues as well as team leadership."
The CEIP Class of 2012 graduates Thursday, April 19, at Greystone. Dennis Goettsch, vice president of marketing at Hormel Foods and CEIP co-founder, is pleased with the legacy that's being created. "The program is delivering exactly what we'd hoped," he said. "In addition to establishing lasting friendships that will serve them well as they progress in their leadership roles, these chefs are better prepared to strengthen their own organizations and build a stronger, more thoughtful culinary industry for the future." Hormel Foods underwrites the cost for program development and tuition for all participating students.
Graduating CEIP students:
-Kristin Bonnell, Sous chef, Acts Life Communities, Pensacola, Fla.
-Christopher Culp, Manager of food & beverage concepts and innovation, InterContinental Hotels Group, Atlanta, Ga.
-Christopher Candullo, Scientist, R&D chef, Hormel Foods, Austin, Minn.
-Jeff Ledford, Executive chef, residential dining, Chartwells, and Higher Education at Xavier University, Cincinnati, Ohio
-Larry Leibowitz, Regional executive chef, East Coast and Guckenheimer, Boston, Mass.
-Ashley Lux, Sous chef, Ceasar's Entertainment, Council Bluffs, Iowa
-Brian Ray, Executive chef, Sodexo Healthcare, Boston, Mass.
-Paul Reinfeld, Director of Dining Services, Chartwells Higher Education, Charlotte, N.C.
-George Shannon, Sous chef, Williamsburg Lodge, Williamsburg, Va.
-Ida Shen, Assistant director, executive chef, UC Berkeley, Berkeley, Calif.
-Gregory Strickland, Executive chef, Vi at Highlands Ranch, Highlands Ranch, Colo.
-Kayleen Vander Veen, Chef and quality control supervisor, Central College, Pella, Iowa
-Justin Watson, Executive chef, Woodstock Inn & Resort, Woodstock, Vt.
-Gregory Wiener, Executive chef, The Buttes-Marriott Resort, Tempe, Ariz.
Applications for the next CEIP class, which will begin in the spring of 2013, will open in September. Details will be available this summer at www.ceipinfo.com.
About Hormel Foods
Hormel Foods Corporation, based in Austin, Minn., is a multinational manufacturer and marketer of consumer-branded food and meat products, many of which are among the best known and trusted in the industry. The company leverages its extensive expertise, innovation and high competencies in pork and turkey processing and marketing to bring branded, value-added products to the global marketplace. The company is a member of the Standard & Poor's 500 Index, Dow Jones Sustainability Indexes, Maplecroft Climate Innovation Indexes, Global 1000 Sustainable Performance Leaders and was once again named one of "The 100 Best Corporate Citizens" by Corporate Responsibility Magazine in 2011. The company enjoys a strong reputation among consumers, retail grocers, foodservice and industrial customers for products highly regarded for quality, taste, nutrition, convenience and value. For more information, visit http://www.hormelfoods.com.
About The Culinary Institute of America
Founded in 1946, The Culinary Institute of America is an independent, not-for-profit college offering bachelor's and associate degrees in culinary arts and baking and pastry arts, as well as certificate programs in culinary arts, Latin cuisines and wine and beverage studies. As the world's premier culinary college, the CIA provides thought leadership in the areas of health and wellness, sustainability, and world cuisines and cultures through research and conferences. The CIA has a network of 44,000 alumni that includes industry leaders such as Grant Achatz, Anthony Bourdain, Roy Choi, Cat Cora, Dan Coudreaut, Steve Ells, Johnny Iuzzini, Charlie Palmer and Roy Yamaguchi. In addition to its degree programs, the CIA also offers courses for professionals and enthusiasts, as well as consulting services in support of innovation for the foodservice and hospitality industry.
The college has campuses in Hyde Park, N.Y., St. Helena, Calif., San Antonio, Tex. and Singapore. For more information and a complete listing of programs at each site, visit the CIA online at www.ciachef.edu.


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Brokers put Verey's departure down to clashes of 'culture', especially with new chief executive Robert Pickering. and to a need for the 179-year-old group to concentrate on business-getters in difficult markets.
Cazenove's value today is probably well south of £1bn. Spearheaded by veteran chairman David Mayhew, it remains a formidable force in new share issues and advice.
It handled some of the biggest and best performing recent floats, such as William Hill and John Wood Group. It creditably warned last year of the impending 'split capital' disaster. But its fund management side, which had £11bn under its wing last year, has had persistent problems.
Cazenove partners must look with envy at rival Robert Fleming, which sold itself to US banking giant Chase for an eye-watering £5bn. It has little choice but to plough ahead with float plans, having started the clock 16 months ago by raising £200m in shares and debt from City funds. It lifted the veil of secrecy at the time by disclosing nine-month revenues of £297m and pre-tax profits of £86m. But that was before markets crashed.
- More about:
- Banking
- Cazenove
- Investment Banks


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- 1[intransitive] to continue to exist for longer than expected The faint smell of her perfume lingered in the room. linger on The civil war lingered on well into the 1930s.
- 2[intransitive] (+ adv./prep.) to stay somewhere for longer because you do not want to leave; to spend a long time doing something She lingered for a few minutes to talk to Nick. We lingered over breakfast on the terrace.
- 3[intransitive] linger (on somebody/something) to continue to look at someone or something or think about something for longer than usual His eyes lingered on the diamond ring on her finger.
- 4[intransitive] linger (on) to stay alive but become weaker He lingered on for several months after the heart attack.
NAmE//ˈlɪŋɡər//Verb Forms present simple I / you / we / they linger
he / she / it lingers
past simple lingered
-ing form lingering
Check pronunciation: linger


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I'm so excited to finally share that I was the June featured member over at Your Scrapbook Stash!
Thanks so much to the owner, Erica, for the honor, as well as for the gift certificate and prize package! :)
I created this layout (re-post) with DeLovely, Prima, and Maya Road products from the YSS store:
And here's another (one of those super-quirky ones with random bits of twine and lots of messy misting) that makes me smile, made with more mists, Delovely, twine, trim, tape, and Melody Ross Artsy Urban paper:
Finally, here's one featuring the Melody Ross Artsy Urban (love those lacquered butterflies!) as well as some Jenni Bowlin butterfly stickers, Tim Holtz tissue tape, and more Prima pebbles and trim:
Thanks again, YSS, for featuring me this past month!
For lots of inspiration, challenges, sales, and fabulous design-team inspiration, go check out the YSS blog HERE.


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DIRECTV's TV Service is Recommended by CableTV.com
We at CableTV.com have gathered data from a number of independent customer surveys, which we use to compare and rank the cable companies and other television services available in your area. This allows us to help you find the best provider for your needs. Based on this information, we've ranked DIRECTV as the top TV service provider among all satellite TV and cable companies in Bluemont, VA.
TV providers in most areas offer access to major networks, but the smaller networks and local channels offered with TV packages in Bluemont may differ from those available in nearby cities. That makes comparing channels and packages just as important as evaluating cost when you're looking for the best cable company in Bluemont, VA. If it's important that you have access to all the Washington Redskins and games, for instance, you'll be more likely to get what you need with a premier package that offers more channels. We provide information on channels, extra features, and prices for all the highest rated providers in Bluemont, so you can be sure you're getting the service that you want at a price you can afford.
Before making recommendations, CableTV.com considers a variety of important factors, including customer service and reliability. This ensures that you're getting the best TV provider for your needs. When you choose a cable company in Bluemont, VA based on our recommendations, you're sure to enjoy dependable coverage and professional customer service.


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Vele Rosse Hotel offers an airport shuttle (available on request) for UAH 300 per vehicle one way. After getting a workout at the fitness center, you can grab a bite to eat at the restaurant or unwind with a drink at the bar/lounge. Other highlights include a spa tub, a sauna, and a snack bar/deli.


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This "Top Ten List of America's Stupidity" was sent to me recently by a reader (Linda W).
10) Only in America … could Politicians talk about the greed of the rich at a $35,000.00 a plate campaign fund-raising event.
9) Only in America … could people claim that the federal government still discriminates against black Americans when we have a black President, a black Attorney General and when roughly 18% – 20% of the federal workforce is black, and according to US Department of Health and Human Service, 39.8 % of all federal entitlements go to black Americans, despite making up approximately only 14% of the total U.S. population.
8) Only in America … could they have had the two people most responsible for the tax code, Timothy Geithner (the head of the Treasury Department) and Charles Rangel (who once ran the Ways and Means Committee), BOTH turn out to be tax cheats who are in favor of higher taxes.
7) Only in America … can they have terrorists kill people in the name of Allah and have the media primarily react by fretting that Muslims might be harmed by the backlash.
6) Only in America … would they make people who want to legally become American citizens wait for years in their home countries and pay tens of thousands of dollars for the privilege, while they discuss letting anyone who sneaks into the country illegally just 'magically' become American citizens.
5) Only in America … could the people who believe in balancing the budget and sticking by the country's Constitution be thought of as "extremists."
4) Only in America … could you need to present a driver's license to cash a check or buy alcohol, but not to vote.
3) Only in America … could people demand the government investigate whether oil companies are gouging the public because the price of gas went up when the return on equity invested in a major U.S. oil company (Marathon Oil) is less than half of a company making tennis shoes (Nike).
2) Only in America … could the government collect more tax dollars from the people than any nation in recorded history, still spend a Trillion dollars more than it has per year – for total spending of $7-Million PER MINUTE, and complain that it doesn't have nearly enough money.
1) Only in America … could the rich people – who pay 86% of all income taxes – be accused of not paying their "Fair share" by people who don't pay any income taxes at all.
What do you think? Agree? Disagree? Please share your thoughts in the comments below.


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CANADA STOCKS-TSX opens lower shadowed by global growth worries
TORONTO, Sept 24 (Reuters) - Canada's main stock index opened lower on Thursday, extending its losses for a third straight day and tracking foreign markets worried about global growth.
The Toronto Stock Exchange's S&P/TSX composite index was down 54.01 points, or 0.4 percent, at 13,329.68 shortly after the open. Materials were the lone gainers among the index's 10 main groups. (Reporting by Solarina Ho; Editing by Chizu Nomiyama)
© Thomson Reuters 2017 All rights reserved.


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Take CableTV.com's Advice and Make DIRECTV Your Next TV Service Provider
We at CableTV.com use the results of independent customer surveys to rank the cable companies and other television services available in your area. This allows us to help you find the best provider for your needs. And according to our research, DIRECTV is the best TV service provider out of all the satellite TV and cable companies in Thendara, NY.
It can be surprisingly difficult to determine which is the best cable company in Thendara, NY. While price is a big consideration, you should also look at the number and selection of channels available. Major national networks are usually available regardless of your location, but the selection of local channels featured with TV packages in Thendara may be different from even similar packages in nearby cities. Opting for a premium, channel-rich package can ensure that you won't miss a single episode of your favorite show or sporting events like or New York Giants games. That's why we've compiled tons of information on the highest rated providers available in Thendara—so you can easily find a package with the channels and features that fit your preferences.
It's easier than ever to pick the best TV provider, thanks to the detailed information offered at CableTV.com. Detailed ratings of local TV providers allow CableTV.com to recommend a top-rated cable company in Thendara, NY based on important factors like dependability and superior customer service. Check the recommendations at CableTV.com and you're more likely to get a dependable cable provider that offers great customer service.