This means that among other things a member would be entitled to payment of fair value of his shareholding in case he decides to dissent from a proposed merger, consolidation, sale or transfer, redemption of his shares or an arrangement, provided the court permits.
“Uncertainty has been cleared…it should be pushed and made into law at the earliest, the decision has infused more confidence into the country’s investment scenario and interest of investors,” Lalit Bhasin, managing partner, Bhasin and Co told HT.
The bill has suggested company boards appoint a director to represent small shareholders. The role of independent directors would also be paramount to safeguarding the interests of all minority stakeholders, said legal experts.
“The bill is in the right direction but we need to wait and watch,” said Manoj Kumar, corporate law expert and managing partner, Hammurabi and Solomon. “There should not be any circumstance where the management forcefully comes up with a situation where minority stakeholders are forced to exit.”