Changes at the Hindu postponed
An EGM of Kasturi and Sons passes resolutions permitting the professionalisation of the 132-year-old newspaper, but a Company Law Board order restrains their implementation. The member says the proposal to remove all the family directors is not in keeping with the spirit of her earlier order.
The HOOT desk.
Monday, May 30 19:27:46, 2011
There were two developments on April 20 in the family dispute within Kasturi and Sons Ltd, which publishes The Hindu. The Company Law Board granted relief to the minority faction of the Board who had filed a company petition before it, while the Extraordinary General Meeting (EGM) that was held today saw the shareholders pass resolutions that seek to remove family members as editors, with a comfortable majority of 60:41. The resolutions passed today originated on April 18, and since the basis of the company petition was the same resolutions, the CLB member at the Chennai bench stayed them. They do not come into effect until further orders.
Eleven petitioners including company directors N Ravi, N Murali and their families, Malini Parthasathy, and Serendipity Investments (P) Ltd had gone to the CLB alleging oppression of the minority. They wanted set aside a board resolution of April 18, 2011 which sought to replace owner editors with professional editors. They also wanted the convening of an EGM on 20 May (today) set aside as oppressive, and they wanted an independent chairman appointed in place of Respondent 2 (N Ram) to conduct future Board meetings. Two of the respondents, Nirmala Lakshman and Nalini Krishnan also sought the same interim reliefs the order said, and strongly opposed the proposal to replace an owner editor with a professional editor.
Today’s hearing comes after some public airing of a family dispute in which N Ram and other directors sought to appoint Siddharth Varadarajan, chief of the paper’s National Bureau as editor in place of N Ravi. They said that Varadarajan would report to N Ram, editor in chief, until such a time as the Board of Directors of the company may decide. The April 18 resolution sought to make family members ineligible for holding editor level jobs in the future.
The Company Law Board member Lizamma Augustine who passed the order granted interim relief, but said that she was not staying the holding of the EGM because the issue was the role of the family in the company and in her view it had to be decided by the shareholders.
The 14 page order made some observations about the paper and its past editorial traditions. It held that the far reaching consequences of the proposal of April 18 was that “a shareholder of the company will be perpetually debarred from holding the post of the editor of The Hindu, which, in my view is contrary to tradition and practice followed in the company since inception.”
The CLB member also said that she doubted that the proposed advisory board which would consist of members of rival groups would be able to guide the non family editor in discharging his duties. She referred to her earlier order of October 2010 which was passed in response to an company petition filed by N Murali and said that the present proposal amounted to wholesale removal of all the family directors which was not the spirit of the order she had passed. She said the board had not addressed the aspects (retirement, entry and exit norms, etc) referred to in her earlier order.
The earlier order however had also batted for N Ram by declining to enforce a retirement age for the chief editor. Today’s order said that the board had given a go by to the idea of framing guidelines for succession and limited the directions of the CLB to removing entire family editors.
The judge said that while she was not restraining the EGM from going ahead, she was restraining the respondents from implementing the resolutions proposed until further orders. She asked for counter petitions to be filed within four weeks. The next hearing will be in August. For the moment the family members who are sought to be removed from editorial positions to make way for professional editors, have survived to fight another day.
Mr N Ram, editor in chief of the Hindu, sent a note to the staff of the paper saying that the EGM had passed Resolutions permitting the professionalisation of the 132-year-old newspaper, though the Board would not implement these resolutions until further orders from the Company Law Board.
Ram challenges CLB stay on changes at The Hindu before HC