The Division bench of Bombay High Court in Invesco Developing Market Funds and Others vs Zee Entertainment Enterprises Ltd. has held that the right to requisition an Extraordinary General Meeting (“EGM”) by shareholders under Section 100(2) of the Companies Act, 2013 is an unfettered right. The Division bench overturned the Single Judge’s order and upheld the rights of the shareholders to convene an EGM without having to disclose the reasons therein. This judgment can catalyze shareholder activism. In light of various corporate governance scandals seen in the startup ecosystem in recent months, this judgment is a reminder that a proactive group of shareholders have various legal tools in their armoury, which they can utilize effectively to keep the management and board of directors of a company in check.
Our colleague, Isha B D analyses this development through her post.
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