High court allows Ram's succession plan
For the first time since the latest episode of the Hindu succession battle went to the courts, editor-in-chief N Ram has something to cheer about. KV Lakshmana reports.business Updated: Jul 01, 2011 15:49 IST
For the first time since the latest episode of the Hindu succession battle went to the courts, editor-in-chief N Ram has something to cheer about. On Friday, the Madras high court in an order allowing Ram's succession plan, set aside an earlier Company Law Board order that stayed implementation of shareholders' decision to professionalise the working of the media company.
What the Friday high court order means is that it paves the way for appointment of Sidharth Varadarajan, Hindu national bureau chief, as the chief editor and lead to the ouster of family members from top editorial positions as per the professionalisation plan. Now, the appointment has to be put up at the next board meeting for a formal approval in the light of the court order.
The professionalisation move -- to appoint an outside family professional - Sidharth Varadaran -- as the chief editor and ouster of all family directors from editorial positions, was vehemently opposed by Ram's younger brother N Ravi and others in the Company Law Board which stayed implementation of all decisions taken by extraordinary general meeting of the Hindu shareholders till the company petition was disposed of.
What the Friday high court order also does is to deprive Ravi a chance of leading the editorial team of the Hindu as he has to step down along with other family members from editorial positions.
Which is why, Ravi has not given up the fight and firmed up plans to challenge the high court order in the Supreme Court at the earliest. "The high court order will not be allowed to go unchallenged. Ravi would sit with his legal team, study the order and then take a call on when to move the apex court," a company official said. He, however, declined to make any comment on the high court order.
Ram moved the high court challenging the CLB order saying that it was not maintainable during a four hour argument on June 14. The high court had reserved its judgement on Ram's petition and pronounced its order today.
Admitting Ram's petition, the high court passed an order setting aside the CLB order that prevented implementation of May 20 EGM decisions on professionalising the working of the 132-year old privately held media company.
Ram was not present at the court hearing on Friday as he was travelling abroad.
Ram had maintained that the CLB had no power to decide the line of succession plan of an organisation and for that reason its order restraining implementation of board decisions, ratified by EGM, was wrong and needed to be quashed.
On Friday, Justice Vinod K Sharma, passed the order setting aside the CLB order, and said that Memorandum of Article of Association of the company does not stipulate the family succession nor does the Company Act any way project the family succession or bars decision of the Board of Directors and shareholders to run the company in a professional manner.
"The imposed order passed by the CLB cannot be sustained. Consequently these appeals are allowed and the decision of the CLB, staying implementation of the decision taken in the extraordinary general meeting (EGM) is ordered to be set aside," the high court judge said. He also directed the CLB to dispose of the company petition, filed by Mr N Ravi, at the earliest.
"CLB is directed to dispose off the main company petition at the earliest, preferably within six months of the receipt of this order copy," Justice Sharma said.