HC sets aside law board stay on Hindu succession
The Madras high court on Friday set aside a Company Law Board order that had prevented Kasturi & Sons (KSL) — publishers of the English daily, The Hindu — from implementing a succession plan passed by its board of directors and ratified by an extraordinary general meeting (EGM) of its shareholders.india Updated: Jul 01, 2011 23:56 IST
The Madras high court on Friday set aside a Company Law Board order that had prevented Kasturi & Sons (KSL) — publishers of the English daily, The Hindu — from implementing a succession plan passed by its board of directors and ratified by an extraordinary general meeting (EGM) of its shareholders.
This can pave the way for the appointment of Siddharth Varadarajan, national bureau chief of The Hindu, as the newspaper’s editor and lead to the ouster of members of the promoter family — including editor N Ravi, executive editor Malini Parthasarathy, joint editor Nirmala Lakshman and senior managing director N Murali — from top editorial and management positions. Varadarajan is not related to the promoters.
The position of editor-in-chief, currently held by Ravi’s elder brother N Ram, will be discontinued. The faction led by Ram has been pushing for the acceptance of the new succession plan at KSL, a closely held family-owned company.
But the legal fight is far from over. “Ravi will consult his legal team, study the order and then take a call on when to move the Supreme Court,” a senior KSL executive said on condition of anonymity.
The board of KSL had on April 18 passed a resolution appointing Varadarajan as editor of The Hindu. It also decided to bar members of the promoter family from holding editorial and management positions in the company.
An EGM of KSL shareholders had ratified these decisions on May 20 with a 60.41% vote. Later that day, the CLB had stayed the implementation of these resolutions.
Ram had challenged this order of the CLB in the High Court on May 25. At its next hearing on June 14, the high court had reserved orders after a four-hour hearing.
Justice Vinod K Sharma, who passed the order, said the memorandum and articles of association of the company did not stipulate family succession, nor did the Companies Act in any way project family succession or bar the board of directors and shareholders to run the company in a professional manner.