Joint venture
Posted By :
Ayushi /
Published on :
22-Oct-2017 01:06 PM /
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1320 /
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There is a joint venture between NTPC and mirza urza Ltd. They both acquire 50-50% shares. In article of Association, it is written that the control of management will be of Ntpc. And, NTPC is controlled or managed by central government as it acquired 70%shares of NTPC. So can we say that central government have control over that joint venture or mirza urza Ltd.?
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Dear Ayushi,
To my understanding, to have control over any company by any Govt./Govt. Undertakings, it shall have 51 percent control.
But as in your case, the AOA of JV mentions that it will have control (considering the fact of percentage of controlling in shares). Well; That's what conflicting between AOA and Act.
To my knowledge, Act overrides the AOA. Thus my answer is "Emphatic No".
In your second case, there lies no question of having control of Govt. because Govt. has not acquired 51 percent of shares in Mirja Urja Ltd.
Others view are solicitated.