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Issues:
Approval of scheme of amalgamation under sections 391(2) and 394 of the Companies Act, 1956. Analysis: The petition sought approval for the scheme of amalgamation between the transferor company and the transferee company. The transferor company, engaged in manufacturing sub-station and transformer equipment, had a share capital of Rs. 5,00,000 divided into 5,000 equity shares. The transferee company, involved in manufacturing sub-station material, had a share capital of Rs. 1,22,51,330 divided into 12,25,133 equity shares. The scheme aimed at consolidating the businesses of the group companies due to similarities in their operations and products. The scheme was expected to result in economies of scale, reduction in expenses, and better resource utilization for mutual benefit. The Board of Directors of both companies unanimously approved the scheme, ensuring no conflict of interest. The exchange ratio for share allotment was determined fairly based on a valuation report. Shareholders of both companies consented in writing to the amalgamation, waiving the requirement for a formal meeting. The High Court of Delhi had previously sanctioned the scheme. The court noted objections regarding share capital adequacy and the proposed name of the amalgamated entity but found the scheme fair and in the interest of shareholders. The objections related to certain parts of the scheme were allowed, excluding them from the approved scheme. The court determined that the scheme was not unjust to creditors and did not violate any laws or public policy. The scheme was deemed fair, reasonable, and beneficial to shareholders. Consequently, the petition was allowed, and the scheme of arrangement was sanctioned, except for specific parts. The petitioner was directed to pay costs to the Official Liquidator, and the order was to be communicated to the Registrar of Companies for compliance with rules.
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