Shareholding Thresholds for Oppression and Class Actions

The Tata-Mistry episode has
brought into focus the minimum shareholding threshold required for a minority
shareholder to bring an action for oppression and mismanagement under sections
241 to 244 of the Companies Act, 2013. In a piece in Bloomberg Quint titled Minority
Shareholder Protection as a Numbers Game
, I examine the implications of
such shareholding thresholds that operate as a filter, which seeks to weed out
frivolous and vexatious suits from the genuine ones. However, as I argue in the
piece, such a quantitative threshold raises a number of issues and is minority
shareholder unfriendly, thereby requiring a review of the policy surrounding
such an approach.

About the author

Umakanth Varottil

Umakanth Varottil is an Associate Professor at the Faculty of Law, National University of Singapore. He specializes in corporate law and governance, mergers and acquisitions and cross-border investments. Prior to his foray into academia, Umakanth was a partner at a pre-eminent law firm in India.

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