It is rather surprising that the wholesale removal of the independent directors of a listed entity failed to grab due attention in the financial media. The company is no non-entity, either.
And, when such a development is an offshoot of a squabble in a business family, the only reason that the financial media has been sotto voce is perhaps due to the same being enacted within a major media corporation itself.
The third-generation owners of Jagran Prakashan Ltd (JPL), the publishing powerhouse behind Dainik Jagran, the highest-circulated daily newspaper in the country, are embroiled in a tug-of-war, that plagues many a family business in the country today.
Mahendra Mohan Gupta (85), Dhirendra Mohan Gupta (82), Devendra Mohan Gupta (76) and Shailendra Mohan Gupta (75), blood brothers, have engaged the priciest lawyers in the country, to settle an internal family dispute as to who should control and have the last word.
Mahendra Mohan Gupta, the eldest of the four brothers, holds a 16.18% stake in Jagran Media Network (P) Ltd, the promoter holding company that owns 67.57% of the listed entity, JPL. He served as the chairman and managing director of JPL from 2005 until 30 September 2023.
The seeds of the conflict were perhaps sown in August 2023, when the board had approved a succession plan, presumably after evaluating all the other family members, of promoting Shailesh Gupta, the son of Mahendra Mohan Gupta, as the managing director to succeed his father.
This resolution was defeated (subsequently explained) in the AGM held on 25 August 2023, to set the stage for the father and son combine to get into a Kurukshetra-style war with the other branches of the family.
Going back in time, Mahendra Mohan Gupta appears to have wrested control of Jagran Media Network P Ltd by virtue of his patriarchal position, being the eldest, with the AoA giving him the right to vote on all resolutions.
However, this was altered in 2023, as claimed, to vest Dhirendra Mohan Gupta and Sanjay Gupta, to vote on behalf of the promoter entity.
Mahendra Mohan Gupta contested their right to do so and, hence, petitions came to be filed in the national company law tribunal (NCLT),
The matter has been heard by NCLT on many occasions. The extracts of the proceedings, so far, show very little progress.
One is left to wonder whether the state of affairs is so pathetic at these fora due to, or in spite of, the most expensive lawyers representing all the 20-odd parties to the dispute.
JPL’s annual report for 2024-25 (the latest available) takes the position that the family dispute did not involve the company and had no direct financial implications for it. The statutory auditors, Price Waterhouse, echoed the same.
But that was not to last long. The board of Jagran Media Network pulled off a coup when, at a meeting held on 12 February 2026, it resolved to petition JPL under Section 100 of the Companies Act, 2013, to convene an EGM (extra-ordinary general meeting) for the removal of all the independent directors (IDs) and the executive director on the board of the latter.
The stated reason to initiate such an unusual corporate action is that the voting rights of Jagran Media Network when these directors were appointed were illegally exercised by Mahendra Mohan Gupta, though his authority had been revoked.
Triggered by this call to action, many applications came to be filed before NCLT, including by JPL, which entered the fray for the first time.
JPL sought a stay on the holding of the EGM as requisitioned, and also submitted that the IDs had filed with the company their objections to be removed in this fashion.
NCLT, vide an interim direction dated 27 February 2026, passed a maintenance of status quo order. This was revisited on 23 April 2026, when it removed the bar and directed that the parties should act according to the law!
That meant JPL should proceed with the conduct of the EGM as requisitioned, for which the company issued a notice dated 2 May 2026, fixing it for 29 May 2026. Along with the notice and the annexures, the detailed representation of the independent directors who were being removed was circulated.
Parallelly, the parties, including JPL, approached the national company law appellate tribunal (NCLAT), with a battalion of legal eagles that cost an arm and a leg.
On 28 May 2026, just a day before the EGM, NCLAT held that the meeting should proceed with the agenda and the voting results should be published; yet, no action should be taken based on the resolutions passed, till NCLT settled the basic dispute of which faction had the authority to represent Jagran Media Network.
The voting results have been released by the company and all the resolutions are approved- implying that all the eight directors stand removed.
In this instance, the promoter vote was exercised by Dhirendra Mohan Gupta and Sanjay Gupta, the group claiming control of the holding company.
The institutions that hold about 8% voted mostly against the resolution. The other public, holding 22%, participated in the voting at an abysmally low level of about 6%. Even in this, a sizeable section voted in favour of the resolution.
Whether these shareholders understood the actual nature of the issue is a moot aspect because their voting was not uniform in respect of all the resolutions, though the issue was the same in every resolution.
Though the family dispute hangs fire, and may not be put to bed in a long time at the pace at which the courts are moving, it has lessons:
NCLT hardly inspires confidence as the right forum for speedy resolution of such matters; though, there is none else.
Family disputes are on the rise. The jury is out on the wisdom of approaching the courts and hiring the most expensive lawyers. How often have these fora put an end such disputes, after incurring huge legal costs?
Every family dispute exposes the weakness of the structure or the way the shares are held, that makes a sensible internal negotiation as the first option to find an acceptable modus vivendi.
IDs becoming pawns in such a dispute is a new development. The regulations should be quickly upgraded to eliminate the promoter voting on both the appointment of IDs and on their removal.
Jagran’s case gives yet another wake-up call on corporate disputes!
(
Ranganathan V is a CA and CS. He has over 45 years of experience in the corporate sector and in consultancy. For 17 years, he worked as Director and Partner in Ernst & Young LLP and three years as a senior advisor post-retirement, handling the task of building the Chennai and Hyderabad practice of E&Y in tax and regulatory space. Currently, he serves as an independent director on the board of four companies.)
This is an issue which cannot be separated from the aspect of the shareholder rights because it is the shareholders who finally vote on the appointment of all, whether it be an independent director or an executive director. The question that has to be resolved here is the authority of the Board, the validity of the Board, and that is for NCLT to take a call on. Till such time the directors on the Board are definitely under a question. Ultimately if the EGM votes that the Board that appointed the directors was not a valid one, did not have the authority, that has to prevail. Whether it affects any of the directors, executive or independent, is immaterial.