HYDERABAD: Andhra Pradesh former CM YS Jagan Mohan Reddy has approached the Hyderabad bench of National Company Law Tribunal (NCLT) against his mother YS Vijayamma and sister YS Sharmila, urging it to cancel the July 6, 2024, transfer of shares of Saraswati Power and Industries Private Ltd in favour of his mother.
Jagan has fallen out with his mother and sister after Sharmila’s political foray in Andhra Pradesh.
A bench of judicial member Rajeev Bharadwaj and technical member Sanjay Puri issued notices to Vijayamma, Sharmila, Saraswati Power and also to the Registrar of Companies in Telangana and other respondents, asking them to file their replies to Jagan’s petition. The bench adjourned the case to November 8 for further hearing.
After his YSR Congress Party swept to power in AP in 2019, Jagan had promised his mother and sister that he would transfer some of the shares in his companies to them. He along with his wife Bharathi then registered a gift deed to this effect.
Jagan said the MoU which he entered into with his mother and sister with good intention will not remain in force since they disturbed the goodwill and sought nullification of the share transfer done in favour of his mother. “To prove that my MoU and gift deeds are real, I transferred all the shares of Sandur Power to Vijayamma in June 2021 as a goodwill gesture,” he claimed.
Later, a gift deed was executed stating that the shares of Saraswati Power too would be transferred after clearance from courts in the ED cases, Jagan explained. But with Sharmila making political forays into AP as a rival to him, Jagan said it caused him distress. Stating that there was no goodwill, he conveyed his intent to nullify the MoU and gift deeds.
“The transfer of shares in Saraswati Power was done behind my back,” Jagan said, questioning the decision of the authorities in effecting such transfer without the beneficiaries producing any share certificates of the companies that were facing ED cases. The case, which was listed in NCLT on September 10, was filed under section 59 of Companies Act, which deals with rectification of the register of members.
Claiming that his mother and sister had broken this trust by transferring the shares of Saraswati Power in their favour without informing him, Jagan sought directions to the ROC to restore the shareholding pattern to the previous pattern. Jagan maintained that the transfer of shares was not lawfully permissible because the company was facing ED cases and that there was a restraint order from the high court.
“Unless all these cases are cleared, no lawful transfer of shares is possible,” he contended in his petition before NCLT. “Even the discreet transfer of shares effected by my mother and sister is also illegal,” the ex-CM said and sought a direction from NCLT to this effect.
Jagan further asserted that his late father, former chief minister YS Rajasekhara Reddy, settled all the property issues during his lifetime and the current assets were a result of his hard work and effort. Conveying his changed mind, Jagan said the gift deed that he executed was a mere manifestation of the intent and not the actual transfer of shares.