IANS | 20 Nov, 2023
A petition has been moved in the NCLT with regards to a dispute
between two brothers, Ashok K. Mittal and Ram Parshottam Mittal 'R.P.
Mittal' over the shareholding, management and control of Hotel Queen
Road Private Limited 'HQRPL' which owns a hotel property known as "Hotel
Royal Plaza" in the national capital.
The petition seeks to affirm that HQRPL is a public company.
It also seeks to declare that the removal of R.P. Mittal and Sarla Mittal from directorship in the EOGM is legal and valid.
Also,
and the rights issue in July, 2009 was legal and valid. R.P. Mittal
received notice to subscribe for shares. They voluntarily declined to
buy shares so R.P. Mittal group cannot be permitted to challenge the
rights issue.
Since, January 14, 2009, Ashok K. Mittal group is in
control and management of HQRPL, having 91.76 per cent shares. R.P.
Mittal group is in minority having only 8.24 per cent shares.
In
2002, in terms of the disinvestment plan of ITDC, a demerger scheme was
approved vide which the hotel property was transferred to a newly
incorporated company, HQRPL.
On September 30, 2002, HQRPL (which
was then under the control of the Government/GOI) convened an EOGM where
a special resolution was passed for converting the company into a
public limited company).
In January, 2009, when Ashok Mittal got
control over HQRPL, the company's account had been declared as NPA and
the bank account had only Rs 2.82 lakhs.
The rooms of the hotel were not up to the mark and neither did the hotel have good banquet hall or swimming pool or a gym.
As the ASIAD games were approaching, the hotel required renovation and upgradation to meet the international standards.
Looking
into the dire need of funds, HQRPL decided to conduct rights issue of
shares and accordingly gave an offer letter dated September 30, 2009.
Even
though the market value of shares was ascertained as Rs 143 per share
by a Valuer, HQRPL offered the shares at a reasonable value of Rs 40
(10+30) each.
R.P. Mittal filed an application being seeking a stay on the Rights Issue.
The
High Court, vide order dated August 18, 2009 refused to stay rights
issue and observed that rights issue is for benefit of the company, the
rate at which shares are being offered is way less than the market
value.
The court observed that if R.P. Mittal subscribes then it
would continue to be a dominant shareholder and if R.P. Mittal chooses
not to subscribe then the said act would be a result of his own
volition.
The high court was of the view that there was nothing illegal or reprehensible in the proposed offer of rights issue.
More than 14 years have already passed since rights issue took place in HQRPL.
The funds brought in through rights issue have been utilized to clear debts of HQRPL.
