Thursday, March 19, 2009

Minority be damned... Have money, will write laws

If you need further proof that the law is written for the rich, do not look very far. In a column for MoneyLife, I had raised the topic of the “Differential Voting Rights” bearing shares that are used as a tool to cheat the non-promoter shareholders. Telco had proposed such an issue on a ‘rights’ basis, which bombed. In that issue, I had mentioned about Jagatjit Industries, where one of the two promoters had issued ‘preferential’ shares to himself, carrying DVR. The interesting thing was that in this instance, each share carried 10 votes!! So, for a small amount of outlay, the person gets control of the full company. The matter went to court, which has upheld that the issue in question is perfectly legal.
So now there is legal sanction for oppression!!

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