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2009 (1) TMI 482 - HC - Companies LawAmalgamation - Held that - On consideration of all the relevant facts and the procedural requirements under sections 391 to 394 of the Companies Act and the relevant rules and on due consideration of the report of Regional Director, which has been filed on 10-12-2008, the Scheme of Amalgamation as proposed deserves to be approved in the manner it was filed and approved in the meetings conducted as per the order of the Court. The Central Government has also reported that M/s. S. Chadha Associates, Chartered Accountants have scrutinised the books of account and other relevant records and reported that the affairs of the Transferor Company have been conducted in such a way that it is not prejudicial to interest to its members or to public interest. The Chartered Accountants have stated that undertakings of compliance of AS 14 of the Institute of Chartered Accountants of India should be taken and in compliance of such directions Company has also given such an undertaking.
Issues:
Confirmation of Scheme of Arrangement under sections 391 to 394 for M/s. Mohta Bearings Limited with M/s. Trishiv Investments Pvt. Ltd. Analysis: The Transferor Company, M/s. Mohta Bearings Limited, incorporated with authorized capital of Rs. 25,00,000 and issued capital of Rs. 24,50,000, was engaged in manufacturing bearings and related products. The Transferee Company, M/s. Trishiv Investments Pvt. Ltd., incorporated with authorized capital of Rs. 20 lakhs and issued capital of Rs. 17,31,000, was involved in money-lending, interest income, and real estate. Both companies were held by Mohta Family with no public interest in shareholdings. Directors of both companies agreed to amalgamate for a common board and diversified product range. The statutory auditors, M/s. Rattan Gupta & Co., recommended a fair exchange ratio for the shares of both companies. The Scheme proposed that Transferee Company issue one equity share of Rs. 10 fully paid up for every 4.5 equity shares of Transferor Company. The amalgamated entity would be named Trishiv Investments Pvt. Ltd. Resolutions by the Boards of both companies were passed, and the Scheme was submitted to the Court for approval under sections 391 to 394. The Court ordered a shareholders' meeting, which was duly conducted. Subsequently, a second motion petition was filed for confirmation of the Scheme. The Central Government, through the Regional Director, reported that the affairs of the Transferor Company were conducted without prejudice to members or public interest. Chartered Accountants verified compliance with AS 14 of the Institute of Chartered Accountants of India. After considering all relevant facts and procedural requirements, the Court approved the Scheme of Amalgamation as proposed. The petition was granted, subject to the Scheme's sanction by the Delhi High Court. The order mandated filing a certified copy with the Registrar of Companies within 14 days, binding all concerned parties, including shareholders of both companies. This detailed analysis highlights the process and considerations involved in the confirmation of the Scheme of Arrangement between M/s. Mohta Bearings Limited and M/s. Trishiv Investments Pvt. Ltd., emphasizing compliance with legal provisions and due diligence in the amalgamation process.
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