In the midst of a raging legal battle in a Delhi court, the Associated Journals Ltd, the company that owns now-defunct National Herald, will cease to be a commercial entity and become a non-profit one with its shareholders also deciding to relaunch its newspapers.
These decisions were taken at an Extraordinary General Meeting of shareholders here today which was called to seek their approval for turning AJL into a not-for-profit Section 8 company under Companies Act, 2013.
“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 thee-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 to 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.
A Sec 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.
Shareholders of a Section 8 company are not entitled to receive any dividend.
The notice for the Extraordinary General Meeting was issued by 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 Vora, along with other directors in the company, had in December, 2010 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.
AJL was founded by Jawaharlal Nehru in 1937 and the company and the newspapers it published — The National Herald, Qaumi Awaz, and Navjivan — played an important role during the freedom movement and “functioned historically in public interest and for social good”.
“This decision of the EGM in essence formalises this larger purpose for which the company was founded in the first place,” a press note issued at the end of the meeting said.
When asked about the other item on the agenda–change in the name of the company, Vora said, “As per Companies Act, we have done all these things and it has to be sent to various agencies also after which we will come to know what decision they have taken.”
“The resolution has been passed to make it Associated Journal but they have to give approval”, Vora said, when asked about the new nomenclature.
The veteran Congress leader said, “the resolution on alteration to the Memorandum of Association … this is the Articles of Association and dealing with preferential (shares) which are among the five resolutions which have been passed unanimously in the meeting.
Asked about legal implications of these decisions on the case in the court, he said they are in the court and this has nothing to do with it.
“This is our EGM and when we think of passing any resolution we come. This is our annual general meeting,” Vora said and declined to take any further questions.
The meeting was attended among others by Ghulam Nabi Azad, Sam Pitroda, Oscar Fernandes, Sheila Dikshit, Sandeep Dikshit, Salim Sherwani, Ratna Singh, Jitin Prasada and Syed Sibtey Razi.