The supreme court of India has dismissed a batch of appeals filed by minority shareholders of Bharti Telecom Limited, upholding the company’s decision to reduce its share capital and buy out individual investors.
The bench observed that valuation of shares is a specialised exercise carried out by experts and noted that the company had followed the due legal process under the relevant provisions of the Companies Act.
The case relates to a 2018 decision by Bharti Telecom, the promoter entity of Bharti Airtel Limited, to reduce its share capital by cancelling shares held by minority shareholders, who together owned around 1.09 per cent of the company.
Bharti Telecom had initially offered Rs 163.25 per share for the cancelled shares. Subsequently, the National Company Law Tribunal revised the valuation to Rs 196.80 per share after removing a tax deduction component.
A group of 35 shareholders challenged the decision before the supreme court, alleging that the valuation was a sham, the share price offered was arbitrarily low, and the notice for the shareholders’ meeting had been issued in a misleading manner.
