The Madras high court on Friday set aside a Company Law Board order and gave go ahead to the succession plan formulated by N Ram, editor-in-chief of The Hindu, a leading Chennai newspaper.
Justice Vinod K Sharma allowed the plea filed by Ram to quash the CLB order which negated the decision of the Hindu director board to appoint Sidharth Varadarajan, head, The Hindu’s national bureau as the editor-in-chief bypassing the claims of N Ravi, the daily’s senior editor.
With Friday’s high court order, the way has been cleared for the elevation of Sidharth Varadarajan as chief editor of the paper. This is the first time in the history of the paper that a non-Kasturi family member assumes the editorship of The Hindu. Along with the appointment of Varadarajan as editor, all members of the Kasturi family have to leave from top editorial positions in the daily. This means that Ravi, cousins Malini Parthasarathi and Nirmala Lakshmanan have to put in their papers.
Ram, in a move to professionalise the family-run paper got the board of directors to approve his succession plan in April. But his younger brother Ravi approached the Chennai bench of the CLB which set aside Ram’s move. Though the extraordinary general body meeting of the shareholders ratified Ram’s move, it did not get the mandatory two-third majority. This made Ram approach the Madras high court. The next board meeting will formally approve Ram’s plan in the light of the court order.
A source close to the Kasturi family told this newspaper that Ravi will challenge the high court order in the Supreme Court. "Ravi is discussing the matter with his lawyers and studying the aspects of the high court order,” said the source.
According to Ram, the CLB had no power to decide the line of succession plan of an organisation and for that reason its order restraining implementation of board decisions, ratified by EGM, was wrong and needed to be quashed.
Justice Sharma, said that Memorandum and Articles of Association of the company do not stipulate the family succession nor does the Company Act any way project the family succession or bars decision of the board of directors and shareholders to run the company in a professional manner.
“The impunsed order passed by the CLB cannot be sustained. Consequently these appeals are allowed and the decision of the CLB, staying implementation of the decision taken in the extraordinary general meeting is ordered to be set aside," the high court judge said.
He also directed the CLB to dispose of the company petition, filed by Ravi, at the earliest. "CLB is directed to dispose off the main company petition at the earliest, preferably within six months of the receipt of this order copy," said Justice Sharma.
