The Karnataka High Court has held that ‘shareholders’ and ‘directors’ of a company do not possess ownership over the company’s data.Justice M Nagaprasanna said this on a March 25 order, while dismissing a petition filed by Aashay Harlalka, the director-cum-promoter and shareholder of Plutus Research, who is accused of stealing data and bringing disrepute to the company.The bench, in its order, said, “The contention that petitioner by virtue of his shareholding, does possess ownership over the entirety of the company’s ‘data’ is therefore wholly misconceived.”“To accept the proposition that each shareholder may lay claim to the company’s assets would lead to juridical chaos, eroding the very edifice of corporate personality,” the order added.Complaint against Harlalka The company is engaged in the domain of quantitative trading. Saurabh Bhola, who is one of the founders/directors of the company and close friend of Harlalka in March 2025, filed the complaint with the police. The complaint was made after Harlalka, acting as a whistleblower, had registered complaints with the Registrar of Companies, SEBI, and other regulatory organisations, highlighting the alleged misdoings of the company.Bhola alleged that Harlalka surreptitiously extended his reach into the domains of High Frequency Trading (HFT) and Infrastructure verticals, and these were areas beyond his authorised limit. He alleged that the petitioner deliberately and unauthorisedly altered critical parameters of trading models, and he had systematically deleted system logs across multiple servers and deleted critical codes, intellectual property of the company, which were integral to the Company’s revenue generation.Advocate Suraj Sampath, appearing for the petitioner, argued that a father cannot be alleged of kidnapping his own children. “When he is an equal shareholder and founder Director of the Company, it cannot be said that he has stolen the data. The data belongs to him, as it belongs to the other two partners,” it was argued.Story continues below this adAdvocate Angad Kamath, appearing for Bhola, opposed the plea submitting that no shareholder can claim himself to be the owner of the data. The owner of the data is the company.Further, Kamath argued that the act of the petitioner amounts to ‘insider theft’ and grave breach of ‘fiduciary duty’. The offence alleged is not a civil dispute but a cybercrime, and the court should not quash the case registered at the nascent stage, Kamath stated.‘Imaginative’ submission of petitioner rejectedThe bench rejected the ‘imaginative’ submission of the petitioner that the data in question, by virtue of his position as the director and shareholder of the company, belonged to him, and therefore, an allegation of theft was flawed.Justice Nagaprasanna said, “Once a company is incorporated under the Companies Act, it acquires a distinct juristic personality, separate and independent of its shareholders and directors. The property of the company, whether tangible or intangible, vests in the company alone.”Story continues below this adElaborating further on the assets of the company in the digital age, the bench said, “The assets of the company are not confined to physical or movable properties, and they extend in significant measure to data, code, and intellectual property.”Following this, the court held that digital assets, no less than physical ones, are owned exclusively by the company. “The petitioner, therefore, cannot seek refuge in his status as a shareholder to negate the allegations of misappropriation.”Matter is not purely civil in nature The bench said allegations of downloading, copying, deletion of source code, proprietary data and confidential digital assets are hues and forms of cyber crime.The court said, “Cyber crime investigations are highly technical and complex, involving forensic reconstitution of data. Therefore, the projection of triviality of the offence by the petitioner, contending that it is purely civil in nature, cannot be acceded to, at this juncture.”Dismissing the petition, the court said, “Investigation must ensue.”