CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Stakeholders Rights

Arjun Industries Ltd has equity shares and 8% preference shares, and its articles allow variation of class rights. It plans a variation of the preference shareholders' rights that also adversely affects equity shareholders. Preference holders of 76% of the issued preference shares consent in writing. Holders of 12% of the preference shares did not consent. Which is correct?

Three-fourths consent of the affected equity class is also needed, and the dissenting 12% preference holders, being at least ten per cent, may apply to the Tribunal within twenty-one days. Until the Tribunal confirms it, the variation does not take effect.

1. AThe variation is valid as soon as 76% of preference holders consent, and dissenters have no remedy
2. BEquity shareholders' consent of three-fourths is also required, and the dissenting 12% may apply to the Tribunal within twenty-one daysCorrect
3. COnly a simple majority of equity shareholders is required in addition, and the dissenters may apply within thirty days
4. DTribunal approval is always required before any variation, whatever the level of dissent