The Hindu succession feud reaches Company Law Board
The family feud in Kasturi & Sons Ltd (KSL), which brings out The Hindu, the third largest English daily in the country, saw aggrieved parties move the Company Law Board (CLB) on Tuesday.india Updated: May 11, 2011 00:39 IST
The family feud in Kasturi & Sons Ltd (KSL), which brings out The Hindu, the third largest English daily in the country, saw aggrieved parties move the Company Law Board (CLB) on Tuesday.
Company sources said a group of the extended family, including editor N Ravi and executive editor Malini Parthasarathy, has filed a petition with the CLB, challenging the KSL board decision of April 18 to appoint Siddharth Varadarajan, the daily’s national bureau chief, as the editor after editor-in-chief N Ram stepped down, and divest editor Ravi and Parthasarathy of editorial responsibilities. The proposal also mentioned that a similar exercise was in the offing on the managerial side.
The petition stated the decision was “oppressive and vindictive and included a disqualifying rule that was not there in the original articles of association of the company”.
The Hindu Group is managed by the descendants of Kasturi Ranga Iyengar, who had two sons, Kasturi Gopalan and Kasturi Srinivasan, who in turn had two sons each. Gopalan’s sons are G Narasimhan and G Kasturi, and Srinivasan’s sons are S Parthasarathy and S Rangarajan.
Today, KSL is controlled by all four families. Shareholders supporting Ram are the G Kasturi and S Rangarajan families, while the other faction led by Ram’s younger brother Ravi is supported by the G Narasimhan and S Parthasarathy families.
The petitioners have asked for a stay on the resolutions adopted at the April 18 board meeting by a 7-5 vote. They have maintained that the board decision was “in contravention of an earlier CLB directive to the company to put in place a succession plan”.
The petitioners have sought a hearing of the petition before the scheduled May 20 extraordinary general meeting (EGM) to ratify the board’s resolutions.
Ordinarily, a 51% majority is required to ratify an ordinary board resolution and as it is the board decision is expected to be carried through.
However, the petitioners have argued that since the proposed changes alter the basic structure and constitution of the company, it needs a special resolution to be adopted by the EGM that requires 75% of the shareholders present and voting to pass a special resolution.
A notice has been served to the other side (Ram and the six board members supporting him), said a company source.