Jackie Shroff files contempt of court plea in NCLT against former stakeholder in Sony Entertainment

Popular Bollywood actor Jackie Shroff has approached the National Company Law Tribunal (NCLT) to enforce his right as a minority shareholder in Atlas Equinfin Pvt Ltd., a company engaged in financial intermediation [Jackie Shroff Vs Atlas Equinfin Pvt Ltd]..The NCLT agreed to hear Shroff’s plea at a later date after the lawyer for Atlas Equinfin informed the tribunal that purchase back of Shroff’s stake is currently under consideration after the Supreme Court has dismissed the company's plea. The case is now likely to come up for hearing in January. .What is Shroff’s connection with the company?.In the 1990s, Shroff was asked to collaborate on launching a TV channel in partnership with Sony Group. A joint venture agreement (JVA) was signed in December 1994, leading to the creation of a holding company, Atlas Equifin, to manage the JV with Sony Entertainment. Atlas held 32 percent stake in Sony Entertainment while Shroff held 10 percent stake in Atlas Equinfin. The company’s authorised capital was increased to ₹1 crore and shares were issued as per the JVA. In 1995, significant changes occurred in the shareholding structure with non-resident stakeholders transferring a large portion of their shares to a Mauritius-based entity.In 2009, the Board of Directors decided to raise additional capital. The paid-up capital was increased to ₹1.4 crore with shares issued at a premium of ₹140 per share. News reports from 2012 suggested that Sony purchased Atlas’ stake. .Jackie Shroff’s plea.In 2023, Shroff filed a petition claiming that the acts of mismanagement and oppression by the majority shareholders harmed his interests in the company. In February 2023, the NCLT found merit in Shroff’s contention that there have been acts of oppression and mismanagement, and therefore directed the majority shareholders to purchase his shares for ₹ 18.53 crore. NCLT reasoned that purchasing his 10% stake would be in the interest to put an end to the deadlock. The company then approached the National Company Law Appellate Tribunal (NCLAT) which in September 2023 dismissed the plea and said,“The Ld. NCLT had decided to end the deadlock by giving directions appealed against. Admittedly the respondent cannot sell his shares in open market, it being a private company and not a listed one, hence the path chosen by the Ld. NCLT to end controversy amongst directors/shareholders is not prejudicial to anyone and would rather be helpful for smooth running of the company.”Subsequently, an appeal was filed before the Supreme Court against the order of NCLAT. The Supreme Court on November 22 this year dismissed the appeal..In the light of the recent Supreme Court decision, the company told the NCLT today that it is in the process of finalising the buyback. The tribunal then decided to defer the hearing.