Turner Morrison calls for J&N chief ouster

NEW DELHI, Nov 23: The wrangle relating to the rights issue of paint maker Jenson and Nicholson (I) Limited (J&N), has taken a new turn...

NEW DELHI, Nov 23: The wrangle relating to the rights issue of paint maker Jenson and Nicholson (I) Limited (J&N), has taken a new turn with one of its shareholders, Turner Morrison group asking the company law board (CLB) to appoint an independent chairman and a new auditor to protect the interest of the minority share holders.

The petitioner, engaged in investment and trading, alleged that J&N’s cancellation of the rights issue was against the law under section 100 of the Companies Act, 1956. Turner Morrison pointed out that CLB intervention was necessary under section 397 and 398 of the Companies Act, 1956 for prevention of oppression of minority’s interest and mismanagement of company.

J&N last year had cancelled its rights issue of 20,68,939 17 per cent unsecured and fully convertible debentures (FCD) as the company feared a takeover bid. Turner Morrison, which held 3.07% stake in J&N was hoping to up its stake to 18.18% after the full conversion of the now controversial rights issue.

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The cancellation of the issues after allotment was rare in Indian corporate history and in this regard the SEBI had also barred the company from raising money from the primary market for the next two years, as there was no violation of takeover code prevalent in India, the sources said.

The part “A” of FCD were supposed to be converted into equity capital on November 1, 1996 and the company had informed its shareholders of cancellation of rights issues on November 15, 1996, after dispatching certificates.

According to sources after the conversion of part “B” of FCD in February 1997 the share holding of Turner Morrison group would have increased to 18.18 per cent.