The Kochi Bench of the National Company Law Tribunal (NCLT) has allowed jewellery group Josco Jewellers to drastically cut down on its paid up share capital from Rs. 120 crore to Rs. 1 crore.
Josco's share capital reduction is one of the largest by a private company in recent history.
Judicial member of the NCLT Kochi Bench Ashok Kumar Borah concretised the Josco's Group's scheme to reduce the share capital of its company, Josco Jewellers Private Limited.
The decision to reduce the company's share capital was taken subsequent to the transfer of the jewellery retail business to Josco Bullion Traders Private Limited. After a review of the capital structure, the Board of Directors of Josco Jewellers Private Limited deemed that the company's paid up capital was more than the what was required for the existing business of the company.
Therefore, the Board, through a special resolution, resolved to reduce the share capital and the same was approved in an extraordinary general meeting.
To this end, the Group approached the NCLT through a petition for the reduction of capital filed under Section 66 of the Companies Act.
When the Registrar of Companies was called upon to respond, he submitted that the Regional Director was the appropriate body to decide on the matter. After the Regional Director filed a report giving his approval to the capital reduction, the NCLT proceeded to allow the prayer.
With this capital reduction, Josco Bullion Traders Private Limited becomes Josco Group's flagship company.
Advocate Nebil Nizar acted for the Josco Group.
Read the NCLT Order: