Associated Journals Limited (AJL) on Thursday held an extraordinary general meeting (EGM) of its members in Lucknow in which the members considered and approved a number of resolutions to convert AJL
Associated Journals Limited (AJL) on Thursday held an extraordinary general meeting (EGM) of its members in Lucknow in which the members considered and approved a number of resolutions to convert AJL into a not-for-profit company without being commercially motivated.
The decision of the members, which comes in the midst of a raging legal battle in a Delhi court, are in pursuance of the revival plan of the company since 2010 which includes conversion of the company to a not-for-profit Section 8 under the Companies Act, 2013, and re-launching the newspapers. “The members considered and approved a number of resolutions to convert AJL into a not-for-profit company,” AJL managing director Motilal Vora told reporters after the nearly three-hour-long meeting of shareholders for changing the structure of the company. “We are considering very seriously relaunching the newspapers,” he said when asked when the dailies would hit the stands, including from Lucknow.
“These decisions of the members of the company are in pursuance of the revival plan of the company since 2010 which includes its conversion into a not-for-profit entity and relaunching the newspapers,” he said. The meeting was held against the backdrop of a criminal case instituted by BJP leader Subramanian Swamy against Congress president Sonia Gandhi, her son Rahul and five others over the acquisition of AJL by Young Indian, a non-profit company under the Companies Act in November, 2010. The Gandhis are believed to have voted by proxy.
Shareholders of a Section 8 company are not entitled to receive any dividend. The notice for the EGM was issued by Mr Vora, who is one of the seven accused in the Herald case in Delhi.
The AJL and its office-bearers are in the eye of a political and legal storm ever since Mr Vora, along with other directors in the company, had in December, 2010 transferred its entire equity to Young Indian Limited in which Mrs Gandhi and Mr Gandhi hold majority stake. The YIL is also a non-profit company though under Section 25 of the Companies Act, 1956 it also has to ensure that its profits and all other incomes are utilised only for the purpose of promoting its objects and not for any other purpose.
In such a company too, profits can’t be distributed as dividend among its members.
