The shares in question were earlier transferred to the names of Indian company's chairman S Rama Iyer and two directors Pothen Paul and K Rajamani from a trust to ensure smooth completion of the UK parent's plan to convert the Indian company into a wholly-owned subsidiary. The court directive was in response to a suit filed by two former directors against Iyer, Paul and Rajamani.

A single bench of the high court comprising Justice MR Lodha passed an order freezing the transfer of shares at a hearing on Thursday after former directors of Kvaerner Powergas India dragged the chairman and two directors to court for transfer of shares of the company -- earlier held by two trusts -- into their names.

The plaintiffs also prayed for the appointment of a receiver to take possession of the transferred shares. Following the court ruling, Kvaerner Powergas India's move to tap the bourses with an initial public offering (IPO) may be delayed. While presenting the case before the court, the defendant lawyer said the shares were transferred to facilitate a public issue and to increase shareholding of the parent company.

The trustees of the two trusts have now decided to terminate the trusts following the UK parent's decision to alter the structure of the board. Trust deeds allow the directors to continue as beneficiaries even after the retirement, sources said. According to the plaint filed by the former directors, the shares were transferred into the names of three present directors excluding the retired directors, who by virtue of trust rules, continued to be beneficiaries.