Lucknow, Dec 19: An Extraordinary General Meeting of the Associated Journals Ltd (AJL), the company that owns National Herald, has been convened here on January 21, 2016, to seek shareholders' nod for changing the structure of the company from a commercial to a non-profit entity.
In the midst of an ongoing controversy over Herald, a notice appearing in newspapers here said the meeting will be held at 1, Bisheshwar Nath Road, Kaiserbagh, Lucknow, to seek the approval of 762 shareholders for turning AJL into a not-for-profit Section 8 company under Companies Act, 2013.
A Section 8 company is a venture established "for promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object" and profits from such a company's activities, as well as any other income earned by it, can be used only for promoting the objectives of the company.
The notice was issued by AJL Managing Director Motilal Vora, who is one of the seven summoned by a Delhi court in response to a summons in the National Herald case. Congress president Sonia Gandhi, party vice president Rahul Gandhi and five others were summoned appear before the Delhi court.
Shareholders of a Section 8 company are not entitled to receive any dividend. The shareholders will also be called upon to change the name of the company from AJL to a new name. The move is considered as an attempt to rectify illegalities found by the trial court and the Delhi High Court leading to summons to Sonia, Rahul and others.
It also informed shareholders that the EGM will decide to alter the Memorandum of Association as well as Articles of Association of the company for the purpose. Another important agenda item, as per the notice, will be "dealing with preference shares".
The AJL and its office bearers are in the eye of a political and legal storm ever since Vora, along with other directors in the company, had in December, 2010 allegedly transferred its entire equity to a new company Young Indian Limited (YIL), in which Sonia and Rahul 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.