Search the Internet          Tips  Sites: Finance, Investment

Plea to shut firm owned by Naidu's family dismissed

Syed Amin Jafri in Hyderabad

The Andhra Pradesh high court dismissed an appeal filed by cine-actor and former MP M Mohan Babu for winding up Heritage Foods India Limited, a company owned by the family members of Chief Minister N Chandrababu Naidu.

A division bench, comprising Justice B Subhashan Reddy and Justice P S Narayana, pronouncing the verdict on Friday, observed that there were no grounds which warranted interference of the court in the functioning of the company.

Mohan Babu filed the appeal against an order of a single judge of the high court who had earlier dismissed his company petition for winding up of Heritage Foods.

He had contended that the company was not being run in accordance with established procedures and statutory provisions under the Companies Act.

He unsuccessfully contended that it was just and equitable to wind up the company on grounds of belated share allotment, improper maintenance of accounts and other irregularities.

He alleged that the management of the company was taking unilateral decisions and jeopardising the interests of minority share-holders. He claimed that he was the principal promoter of the company and contributed nearly 30 per cent to the initial share capital. He was also a director of the company.

He alleged that Chandrababu Naidu later gained control over the company by unilaterally issuing additional shares to his family. Efforts were made by the chief minister to convert the company into a proprietary concern of his family.

He further alleged that he was removed as director by the company through misuse of a blank paper signed by him and given to Chandrababu Naidu in good faith.

The blank paper was converted into a resignation letter though he had never quit as a director of the company. He also contended that the resignation of Chandrababu Naidu as managing director of the company on becoming chief minister was 'fabricated.' However, the court rejected all his contentions.

A one-time close friend and confidante of Chandrababu Naidu, Mohan Babu was with the Telugu Desam Party before he parted ways with the chief minister four years ago. His term as Rajya Sabha member ended in March 2000.

Money
Business News

Tell us what you think of this report