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Delhi High Court Upholds BharatPe's Consent in Unity SFB Decisions
Sentiment: NeutralHigh Priority
What Happened?
The Delhi High Court ruled that Unity Small Finance Bank must obtain BharatPe's consent for key decisions, dismissing Unity's appeal against this requirement. The court emphasized the importance of a shareholders' agreement in corporate governance.
Key points
- The court dismissed Unity SFB's appeal against an interim order requiring shareholder consent.
- Unity SFB sought to increase its authorized share capital from ₹4,000 crore to ₹4,900 crore.
- The proposed increase could dilute BharatPe's stake from 49% to 21%.
- A shareholders' agreement from October 26, 2021, mandates prior written approval for strategic decisions.
- The court rejected Unity's argument that the shareholders' agreement conflicted with its articles of association.
Key insights
- The ruling may lead to stricter adherence to shareholder agreements in future corporate decisions.
- Unity SFB's governance structure could face challenges if it fails to comply with court directives.
- BharatPe's influence in Unity SFB's operations is likely to remain significant due to this ruling.
Why it matters
This ruling reinforces the importance of shareholder agreements in corporate governance, impacting how Unity SFB operates.
Entities
Delhi High Court· LocationBharatPe· CompanyUnity Small Finance Bank· CompanyResilient Innovations· CompanyCentrum Financial Services· CompanyReserve Bank of India· Organization
Source
Business Standard
