Family dispute at Jagran Prakashan: Guptas petition NCLT alleging minority shareholder oppression

If HBO introduced us to the Roys and their media empire Waystar RoyCo in the drama series Succession, real-life events brought the Jains of Jagran Prakashan into the spotlight. In both the fictionalised show and the factual feud, the common theme revolves around three elements: media, power and succession.

The Guptas are owners of Jagran Media Network Investment Private Limited (JMNIPL), established in 1942 with diverse media operations across print, digital, radio and others. The ownership of the group was split between six branches of the family of founder Puran Chandra Gupta after his demise. Chairman Mahendra Mohan Gupta planned to step down in 2021, and sought a successor. However, a family dispute emerged, resulting in a suit. Mahendra Gupta, his son Shailesh Gupta and VRSM Enterprises LLP filed a petition before the National Company Law Tribunal (NCLT), Allahabad, alleging minority shareholder oppression, and sought a stay on a proposed board meeting that was to nominate members as representatives of the listed company, with the elder Gupta maintaining that he was the authorised representative with the sole rights to represent the company.

VRSM Enterprises LLP is a limited liability partnership firm operating in the management consultancy space firm incorporated on January 16, 2017, where Gupta family members Shailesh Gupta, Ruchi Gupta, Mahendra Gupta and Vedant Gupta are partners.

The petitioners hold a combined 16.18 percent shareholding in JMNIPL, which in turn owns a 67.97 percent stake in Jagran Prakashan, which among other things brings out the leading Hindi newspaper Dainik Jagran.

Their direct and indirect shareholding in JMNIPL amounts to 11.29 percent, according to a BSE notice. The majority of JMNIPL's shares are held by members of the extended Gupta family, including the petitioners.

"The outcome of the petition and its potential impact on the company remain uncertain at this stage," the company said in its intimation under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, after reviewing the claims.

The notice also said that the petition does not allege mismanagement within the company.

However, the ongoing legal battle has raised concerns about the stability and governance of the media group, with industry experts closely monitoring the developments, which could significantly affect the future of Jagran Prakashan and its management.

Quarterly results for the company have not been released yet, unlike other listed companies in the print space. Its last report was released in May 2023 where Dainik Jagran reported a 55.86 percent decline in its consolidated net profit to Rs 23.27 crore for the fourth quarter of FY23, compared to Rs 52.73 crore in the same quarter the previous year.