http://www.livemint.com/2011/04/22223217/Hindu-directors-may-move-court.html?h=B
Hindu directors may move court over ouster: The board members could contemplate taking whatever course of action that is possible in the case, says managing director N.Murali.
New Delhi: Five members of the founding family of The Hindu newspaper are considering a legal challenge to the move to oust some of them from positions they hold at the newspaper.
“In the next couple of days, we could arrive at decisions on the way forward,” said N. Ravi, a member of the board and editor of the family-run paper. “As of now, we are weighing all options; could be legal, too.”
He is among the board members of Kasturi and Sons Ltd, which owns the paper, who will have to step down if proposals made at an 18 April board meeting are approved.
N. Ram, editor-in-chief of The Hindu and Ravi’s brother, and board members who support him have proposed the appointment of Siddharth Varadarajan in his place. Varadarajan is the national bureau chief of The Hindu. At the same meeting, seven members of the 12-member board voted in favour of the current editorial directors stepping down from their posts.
The five board members opposing the board resolution are Ravi; N. Murali, managing director; Nirmala Lakshman, joint editor; Malini Parthasarathy, executive editor; and Nalini Krishnan. Murali said the board members could “contemplate taking whatever course of action that is possible in the case”. He refused to elaborate.
Parthasarathy declined to comment, but expressed her views on microblogging site Twitter: “Last word has not been said on the Hindu story. A wafer-thin majority cannot hustle substantive structural change in an organization.”
Board members or shareholders against the proposal have the option of seeking legal relief. “If they can prove that there is some mismanagement or oppression, they can get an injunction from the Company Law Board,” said Gauri Rasgotra, a partner at law firm Khaitan and Co., adding that company law protects the rights of minority stakeholders.
“They can also state that the resolution is void and seek an injunction to restrain the company from passing the said resolution,” Rasgotra said, referring to the 18 April resolution that drove Ravi to make the matter public in an email addressed to The Hindu’s 870 journalists on Thursday.
Ram defended himself against the accusations of bias that Ravi made in his letter. It was unfair to make such allegations as it involved the reputation of the newspaper, Ram told reporters in Delhi on Friday. A telecom ministry advertisement, which Ravi had cited in his letter as an example of the paper’s independence being undermined, was carried by 14 other papers as well, Ram said.
Varadarajan said there had been no change in his duties. “I have not got any formal note, and I continue functioning as I was earlier. Things will become clearer when the shareholders meet at the EGM (extraordinary general meeting),” he said.
An EGM of 50 shareholders is to be convened on 20 May to discuss issues related to corporate governance and succession planning. “The meeting will also discuss the new editorial appointment,” said Ravi, referring to Varadarajan’s new position.
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