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2018 (7) TMI 2105 - Tri - Companies LawConversion of Private Company into Public Company - illegal and fraudulent allotment of shares - HELD THAT:- In terms of the reliefs sought by the Petitioners the rights issues ought to have been made by the Company to all the existing shareholders at the relevant points of time. In this case the Company has not intimated or gave any chance to the Petitioners to acquire the shares at the value for which it was offered to the Respondents - In this case the Respondents have not denied this fact but have stated that since the Petitioners were interested in exiting the Company it was considered that they will not be interested in subscribing to the rights issue of the Company. The mere fact that the Petitioners had intent to exit the Company is not a ground for denying their right to subscribe to additional shares in proportion to their shareholdings vis-a-vis that of the total paid-up capital of the Company. The Tribunal hereby cancels the allotment of shares made on 09.04.2007 and 27.09.2010 as being in violation of provisions of section 81 of the Companies Act, 1956 - the Company may refund the amount on account of the additional issue of shares to the 2nd, 4th, 5th, 6th, and 7th Respondents made on 07.04.2007 and 27.09.2010 and accordingly rectify the register of members after making the refund to the concerned Respondents. Petition disposed off.
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