ALTERNATIVE DISPUTE RESOLUTION CELL, DNLU

FACT PROPOSITION - DNLU INTRA MEDIATION COMPETITION, 2022

Waystar Royco Ltd. (hereafter referred to as ‘WRL’) is an unlisted company, around

66% of its shares are owned by Waystar Trusts and 18% of its shares are owned by
Vaulter Group. WRL is the holding company for more than 18 subsidiary companies
which are part of the Waystar conglomerate. The Executive Chairman of WRL is Logan
Roy who was also one of the promoters of the company and held significant states in the
Waystar Trusts as well. He had led WRL for more than 21 years and was looking for a
person to replace him as the Executive Chairman of the Company.

Mr. Stewy is the heir of Vaulter Group and also a member of the Board of Directors of
WRL. Mr. Logan Roy upon thinking of retirement, and after a lot of deliberation decided
to appoint Mr. Stewy as the Executive Chairman of WRL since he was also one of the
majority shareholders and would ensure that the interest of WRL is taken care of. Before
the appointment of Mr. Stewy Vaulter as the Executive Chairman, Mr. Logan Roy
personally guided him for a year to train him for the position. While appointing Mr.
Stewy Vaulter, Logan Roy had said in a press release that “He has been on the Board of
WRL since August 2006 and I have been impressed with the quality and caliber of his
participation, his astute observations and his humility. He is intelligent and qualified to
take on the responsibility being offered and I will be committed to working with him
over the next year to give him the exposure, the involvement and the operating
experience to equip him to undertake the full responsibility of the Group on my
retirement.”

Mr. Stewy Vaulter took over as the Executive Chairman of WRL in January 2020.
However, his style of managing the company was very different from that of Mr. Logan
Roy. Mr. Stewy Vaulter voiced his opposition to the group’s often expensive decisions -
like the one to acquire luxury car brand ‘Nimble’, or rolling out Mr. Logan Roy pet
project, the affordable ₹1 lakh ‘Pico’ Car. He also voiced his opposition to investing
in the aviation business, which had been a dream of WRL since its inception. All this
made Mr. Logan Roy upset and he approached Mr. Stewy Vaulter to resign from the
post of
Executive Chairman in October 2021 on the grounds that the Board of Directors had lost
faith in him.

However, Mr. Stewy Vaulter did not resign from the post and in November 2021 an
extraordinary General meeting of WRL was called wherein Mr. Stewy Vaulter was
removed from the post of director. Thereafter, Mr. Logan Roy took over as the interim
Executive Chairman of the company.

On this removal of Mr. Stewy Vaulter from the board, Mr. Stewy has claimed that he was
unjustifiably removed from the Board for taking decisions which did not please Mr.
Logan Roy. He alleged that most of the businesses which were initiated by Mr. Logan
Roy were loss making and that they did not serve any interest of the company. He also
alleged that his removal from the Board has brought down his public image.
Subsequently, Mr. Stewy also made many allegations against persistent nepotism in
WRL and how the outsiders are thwarted to hold positions of responsibility. Mr. Stewy
publicly said that Mr. Logan is a hypocrite and only does whatever he thinks is right.

On the other hand, Mr. Logan Roy claimed that Mr. Stewy was inefficient since he had
closed down various lines of business and did not start any new venture in the company.
He also stated that Mr. Stewy Vaulter was removed from the Board since the majority of
the directors of the company as well as the majority shareholders had lost faith in him,
and Waystar Royco was at its lowest under the chairmanship of Mr. Stewy Vaulter.

Mr. Stewy Vaulter sent a legal notice to WRL stating that his removal from the board
was illegal and demanded compensation for the same. Mr. Logan Roy suggested that the
matter be resolved between the companies only since Vaulter Group still holds a
significant portion of WRL shares and wishes to settle the issue through an alternative
method of dispute resolution i.e. mediation.

Mr. Stewy and Mr. Logan will represent themselves in the mediation session along with
their counsels, Mr. Logan Roy being the requesting party and Mr. Stewy as the
responding party.
Firstly clarify the laws in respect of the removal of the executive chairman of a private
limited company.

Read about the executive chairman of a company.

https://www.huntclub.com/blog/executive-chairman-vs.-ceo-whats-the-difference

Can Board fire the CEO?

- CEO is a salaried officer.

https://www.quora.com/Can-an-executive-chairman-be-fired

Opportunity of being heard (not mentioned in the fact sheet)

How logan roy has influential position.

Read about the extraordinary general meeting of a private limited company.

Check the guiding principals in respect of the promoter mst probably he cant be in an
executive role.

Stewy - Defamation ( compensation de dega pr bahaut thoda sa)

Roy - promoter can’t be indulged in the the executive role to a very large extent.

http://epgp.inflibnet.ac.in/epgpdata/uploads/epgp_content/law/04._corporate_law/
13._promoters,_their_position,_powers,_duties_and_liabilities/et/5675_et_13_et.pdf