TMI Blog1989 (8) TMI 277X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of the petition are as follows. The petitioners are officers of a company registered in Japan and known as Sony Corporation. Sony Corporation entered into collaboration or joint venture agreement with Chhabria to establish Somtron Company at Hongkong. Holding of Sony Corporation was 40% while that of Chhabria 60%. In the year 1979, Orson Electronics Limited was incorporated in India and the holding of Somtron in this Indian company was 76%, while the balance 24% was distributed amongst the shareholders, who are Indian residents. In view of the holding of 76% of Somtron, two directors on the Board of Orson Electronics Limited were nominated from time to time by Sony Corporation. Petitioner No. 1 was appointed on the board of Orson Elec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o are the international chartered accountants and who are the accountants of Somtron and Company in Hong Kong, should be advised to investigate and audit the accounts. Shri Chhabria expressed his willingness to co-operate with Price Waterhouse regarding investigation of Orson Electronics Limited. In the meanwhile, some of the interim reports were tendered by Lovelock and Lewes, but Chhabria did not forward them immediately to the petitioners. Ultimately, a meeting took place in Bombay between petitioner No. 2 and the other directors of Orson Electronics Ltd. and the petitioners became aware that the balance-sheet and profit and loss accounts will not be laid before the company at the annual general meeting. The petitioners realised that f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Somtron Company, Hong Kong. Shri Setalvad submits that the petitioners had taken reasonable precautions and had advised Chhabria to appoint Price Waterhouse to investigate into the affairs. Shri Setalvad submits that whatever may be the default committed by the Indian directors of Orson Electronics Limited, the petitioners cannot be held responsible, nor can it be suggested that the petitioners have acted mala fide or dishonestly or unreasonably. In my judgment, the submission urged by Shri Setalvad is correct and deserves acceptance. The petitioners are required to be relieved from any intended prosecution in respect of violation of provisions of sections 210 and 220 of the Companies Act. I wish to make it clear that the fact that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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