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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.

Source: Corporate

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