clear that the promoters can realign the control and management of the company by getting rid of unnecessary interference from the minority shareholders. Yet another situation may arise in case of a public company, which wishes to retain its character as a public limited company. The company cannot be permitted to extinguish the entire class of public shareholders by mooting a scheme for arrangement, compulsory acquisition or reduction of share capital. This is surprisingly debatable when the company is delisted and its scheme has been sanctioned. They still will be able to invite public for subscription to the shareholdings after having compelled the erstwhile minority public shareholders to exit by using the majority vote of the promoter …show more content…
However the other side of the scheme raises yet another esoteric debate. In the case of Ram Kohli v. Indrama Investment Private Limited , the court has looked into the concerns of the company which may arise due to the minority shareholders (holding only 0.001% shares) holding the company to ransom, where 99% of the shareholders had already accepted the scheme and the majority of the remaining shareholders comprising 1% had accepted the scheme and taken money in lieu of their shares. The court had therefore sanctioned the scheme on the ground that the court does not act as a court of appeal and therefore will not go into the commercial wisdom exercised by the creditors and the shareholders of the company who have ratified the scheme by the requisite majority unless it is unreasonable, unfair and unjustifiable. Moreover yet another recent case of Cadbury India Limited , demonstrates how the company was successful after a five year long legal battle with two minority