NCLAT dismisses minority shareholders’ plea in Minosha India case

The National Company Law Appellate Tribunal (NCLAT) on Thursday dismissed a petition filed by minority shareholders of printing solutions company Minosha India, formerly Ricoh India, challenging their “wrongful expulsion” from the company via capital reduction scheme.

The bench, led by Justices Yogesh Khanna and Ajai Das Mehrotra, noted that the appellants, who are minority shareholders, collectively hold only 0.025% of the total shares, which is "miniscule and negligible" compared to that of other public shareholders.

“Before us, too, valuation of shares was never an issue raised. The only argument is non-promoters should be treated as a separate class and they only be allowed to vote on special resolution for reduction. We disagree,” they said.

“No separate class is permitted under Section 66 of the Companies Act, 2013 or in any other provision of the Companies Act, 2013. The appeal thus has no merit and is accordingly dismissed.”

The company was acquired by Kalpraj D Dharamshi and Rekha Jhunjhunwala in 2019 as part of the corporate insolvency resolution process. This process included a condition for delisting the equities and reorganizing the share capital, which was executed successfully. 

Capital reduction is a process where a company cuts the amount of its share capital, either by making payments to shareholders or by cancelling some shares.

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Minosha moved the NCLT in October 2022 to reduce its capital to ₹45.3 crore from ₹47.9 crore, proposing that 5.38% of its share capital would be diluted in the process. 

The company argued that this capital reduction would allow its public shareholders to exit at a fair valuation, given that the shares were not tradeable since their delisting in 2019.

However, this was opposed by minority shareholders who sought directions to allow them to opt to either exit the company or remain invested.

On 19 May, the NCLT, led by Justices Kuldip Kumar Kareer and Anuradha Bhatia, allowed Minosha to reduce its capital and transfer part of the property as envisaged in the proposed reduction.

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Aggrieved by the NCLT order, shareholders moved the appellate court, alleging that they were not given an option but were forced to exit by the 94.62% shareholders belonging to the promoter group.