New Delhi: The Supreme Court of India on Tuesday dismissed a batch of appeals filed by minority shareholders of Bharti Telecom Ltd, upholding the company’s decision to reduce its share capital and buy out small investors.
A bench comprising Justices Sanjay Kumar and K Vinod Chandran said the valuation of shares is an ex-pert exercise and found that the company had followed due legal procedure under the Companies Act.
The case relates to a 2018 decision by Bharti Telecom Ltd — the promoter of Bharti Airtel Ltd — to re-duce its share capital by cancelling shares held by minority investors, who together owned about 1.09 per cent of the company.
The company had initially offered Rs 163.25 per share to the minority shareholders. The National Com-pany Law Tribunal later raised the value to Rs 196.80 per share after removing a tax deduction from the calculation.
However, a group of 35 shareholders challenged the move in the apex court, alleging that the valua-tion was a “sham”, the price offered was arbitrarily low and the notice for the shareholders’ meeting was misleading.
Rejecting the appeals, the court observed that the investors were seasoned market participants who chose to hold the shares despite the company being unlisted and offering no dividend, liquidity or exit options for years.
The bench said the company’s process of capital reduction and shareholder exit complied with legal requirements.