NCLT Approves Jagan’s Request to Revoke Saraswati Power Share Transfer

Quick Summary

• The National Company Law Tribunal (NCLT) Hyderabad bench has allowed a petition filed by former Andhra pradesh Chief Minister Y.S. Jagan Mohan Reddy, seeking cancellation of the “illegal transfer” of shares in Saraswati Power and Industries.
• The shares,previously held by Mr. Jagan and his wife Bharathi, had been transferred to his sister Y.S. Sharmila and mother Vijayamma.
• Mr. Jagan sought reinstatement of the shareholding in their names through a petition filed on September 3, 2024.
• Mr. Jagan’s counsel confirmed that the tribunal allowed the petition and noted that specific directions were included in the order.
• Ms. sharmila’s advocate stated they will appeal against the ruling either at an appellate tribunal or high court level.
• Share distribution within Saraswati Power is as follows: Vijayamma holds 48.99%, Mr. Jagan holds 29.88%, Ms.Bharathi owns 16.30%, with Classic Realty Pvt Ltd owning the remaining stake.
• The dispute arose amidst strained relations between Mr. Jagan Mohan Reddy and ms.Y.S Sharmila, who currently leads Andhra Pradesh congress.

Indian Opinion Analysis

The NCLT’s ruling highlights a significant legal battle within one of Andhra Pradesh’s prominent political families over control in Saraswati Power & Industries Pvt Ltd.,underscoring how family dynamics can intersect with corporate governance issues in family-owned companies.

Legally, this decision reassigning share ownership could set a precedent for handling disputes involving alleged “illegal transfers” within such entities under India’s corporate laws, specifically adhering to safeguards meant to prevent unauthorized changes in shareholding without consent from primary stakeholders.

Politically, implications may emerge given existing tensions between Mr.Jagan Mohan Reddy & his sister Ms.Sharmila now active leadership roles across separate parties possibly escalating intra-family rifts impacting broader public perceptions upcoming electoral strategies.Read more: Link