Photo of Rajashri Seal

Associate in the General Corporate Practice at the Mumbai office of Cyril Amarchand Mangaldas. Rajashri can be reached at rajashri.seal@cyrilshroff.com

Company Law

Background

The law on minority squeeze-out has not been a glorious chapter in the history of India’s company law. The Parliament, as a matter of legislative policy, appears to be uncomfortable with enacting a law that forces minority shareholders to compulsory sell their shares. The government perceives it as a kind of ‘expropriation’. Hence, despite Dr. JJ Irani Committee’s specific recommendation, our Parliament has adopted a conservative approach while providing majority shareholders with the mechanism to ‘buyout’ the shares held by the minority shareholders. Even after the ‘right to property’ was abolished as a fundamental right under our Constitution, law makers seem uncomfortable in giving such right to majority shareholders, and half-hearted attempts have been made to provide majority shareholders with the ability to fully own a company.


Continue Reading Minority squeeze-out under our Company Law – Is it a legislative policy dilemma?