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2010 (5) TMI 385 - HC - Companies LawAmalgamation scheme - Held that - Having heard Mrs. Swati Soparkar learned advocate appearing on behalf of the petitioner Company and Shri R.M. Chhaya learned Central Government Standing Counsel appearing for the Central Government and having gone through the petition affidavits filed and the documents produced on record and having considered the submissions made in this regard more particularly the report submitted by the Regional Director and reply thereto by the petitioner Company by way of additional Affidavit dated 5-3-2010 and being satisfied with the Scheme of Amalgamation I hold that it would be in the interest of the Companies its members creditors and more particularly considering the fact that the Scheme of Amalgamation has been sanctioned by the Bombay High Court in favour of the transferor Company prayer in terms of para 27(a) of the petition is hereby granted.
Issues:
1. Sanction of a Scheme of Arrangement for Amalgamation. 2. Approval of equity shareholders for the proposed Scheme. 3. Observations/objections raised by the Central Government. Analysis: Issue 1: Sanction of a Scheme of Arrangement for Amalgamation The petitioner, a transferee company, filed a Company Petition seeking sanction for the Amalgamation of a transferor company. The transferor company had initiated proceedings in the Bombay High Court, and the Scheme had been approved. The equity shareholders of the petitioner company unanimously approved the Scheme at a meeting convened as directed by the Court. There were no secured or unsecured loan creditors of the petitioner company. The petition was admitted, and public notices were duly advertised. No objections were raised after publication. The Central Government, through the Regional Director, raised certain observations and objections regarding the Scheme, which were duly addressed by the petitioner. Issue 2: Approval of equity shareholders for the proposed Scheme The equity shareholders of the transferee company unanimously approved the proposed Scheme of Amalgamation at a meeting convened as directed by the Court. The Chairman's report confirmed the approval, and no objections were raised post the meeting. The petitioner ensured compliance with all necessary procedures and obtained the required approvals. Issue 3: Observations/objections raised by the Central Government The Regional Director, representing the Central Government, raised concerns regarding the listing of the transferee company's shares, the Fairness Opinion of Merchant Bankers, and the company name not aligning with its business. The petitioner addressed these concerns in detail through an additional affidavit, explaining the steps taken to comply with SEBI guidelines, obtain Fairness Opinion, and the procedure for changing the company name post the Amalgamation. The Court considered the explanations provided by the petitioner and found no reason to refuse sanctioning the proposed Scheme of Amalgamation. In conclusion, after considering all submissions, reports, and documents, the Court granted the prayer for sanctioning the Scheme of Amalgamation. The petition was disposed of, and costs were awarded to the Central Government Standing Counsel. The judgment highlighted the importance of protecting the interests of the companies, their members, and creditors, especially in light of the Scheme being sanctioned by the Bombay High Court.
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