2016 (2) TMI 1125 - HC - Companies Law

Scheme of Amalgamation allowed - adherence to directions for convening separate meetings of the Equity Shareholders resident in India and Equity Shareholders resident outside India of the applicant Company and dispensation of the meetings of the Secured and Unsecured Creditors of the applicant Company.

Summary

Issues:
Application under Sections 391 to 394 of the Companies Act, 1956 for Amalgamation of two companies - Dispensation of meetings of Secured and Unsecured Creditors - Approval of SEBI for public shareholders - Directions for convening separate meetings of Equity Shareholders.

Analysis:
The applicant company filed an application under Sections 391 to 394 of the Companies Act, 1956 for the proposed Scheme of Amalgamation of two companies. The Court considered the submissions made by the advocate for the applicant regarding the positive net worth of both companies and the assurance that the creditors' rights would not be prejudicially affected. Based on the certificates issued by Chartered Accountants and the compliance with loan agreements, the Court held that meetings of Secured and Unsecured Creditors were not necessary and dispensed with them.

Regarding the approval of SEBI for public shareholders, it was highlighted that the applicant, being a listed public limited company, had obtained prior approval through stock exchanges. The compliance with SEBI Circulars and the procedure for obtaining approval from public shareholders through Postal Ballot and evoting were duly noted by the Court.

The Court passed an order for convening separate meetings of different classes of Equity Shareholders to consider and approve the proposed Scheme of Amalgamation. Detailed directions were provided for the conduct of these meetings, including the issuance of notices, appointment of Chairman, quorum requirements, and provisions for voting by proxy. The Chairman was mandated to report the meeting results to the Court within 14 days, along with verification by affidavit. The publication of the notice in the Official Gazette was ordered to be dispensed with.

In conclusion, the Court disposed of the application after issuing comprehensive directions for the conduct of meetings and ensuring compliance with legal requirements under the Companies Act, SEBI regulations, and the proposed Scheme of Amalgamation.