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2011 (9) TMI 841 - HC - Companies LawAmalgamation sanction of scheme of amalgamation company should file its Balance sheet, and profit and Loss account for the financial year 30.9.2011 before the scheme being put into operation - accounts of the petitioner company for the period 1.10.2010 to 30.9.2011 has not been audited, not approved by the Board of directors of the petitioner company, its shareholders, its creditors etc. Held that - proposed scheme was to be sanctioned subject to condition that audited accounts for period 1-10-2011 to 30-9-2011 would be filed with Regional Director.
Issues Involved:
1. Statutory compliance by the petitioner company (Second Transferor). 2. Sanctioning of the Scheme of Amalgamation. 3. Conditions for sanctioning the Scheme of Amalgamation. 4. Appointment date of the Scheme of Amalgamation. 5. Filing and auditing of financial accounts. 6. Role of Regional Director and Official Liquidator. Detailed Analysis: Statutory Compliance by the Petitioner Company (Second Transferor): The petitioner company, "Siemens BPO Services Pvt. Ltd.," sought the sanction of the Scheme of Amalgamation. The company was incorporated on 13.10.2000 and has undergone several name changes. The petition included the necessary documents such as the Memorandum and Articles of Association, audited balance sheets, and board resolutions approving the scheme. Sanctioning of the Scheme of Amalgamation: The Scheme of Amalgamation involved the first transferor company, Siemens Corporate Finance Pvt. Ltd., and the transferee company, Siemens Information Systems Ltd. The High Court of Mumbai had already sanctioned the Scheme of Amalgamation subject to the order to be passed by the High Court of Karnataka. Conditions for Sanctioning the Scheme of Amalgamation: The court examined whether statutory compliance was made by the petitioner company. The Regional Director raised concerns about the financial accounts not being filed for the period ending 30.09.2011. The petitioner company agreed to audit and file these accounts, and an affidavit was submitted to comply with the observations made by the Registrar of Companies. Appointment Date of the Scheme of Amalgamation: The appointed date for the Scheme of Amalgamation was specified as 1.10.2011. The court noted that the latest financial position and auditors' report available were up to 30.09.2010. The court emphasized the importance of having the financial accounts up to the appointed date audited and approved to ensure transparency and compliance with statutory requirements. Filing and Auditing of Financial Accounts: The court directed the petitioner company to file the audited accounts for the period 1.10.2010 to 30.09.2011 with the Regional Director and the Official Liquidator. The court also instructed that these accounts be audited by a panel auditor and a report be submitted to the court. Role of Regional Director and Official Liquidator: The court underscored the role of the Regional Director and the Official Liquidator in scrutinizing the books and accounts of the company to ensure no prejudicial conduct against shareholders or the public. The court retained the power to supervise the implementation of the Scheme and make necessary modifications. Order: The High Court of Karnataka allowed the Company Petition 27/2011 and sanctioned the Scheme of Amalgamation subject to the following conditions: 1. The petitioner company must file the audited accounts for the period 1.10.2010 to 30.09.2011 with the Regional Director and Registrar of Companies by 30.11.2011. The Regional Director should then examine and report on these accounts within two weeks. 2. The petitioner company must also serve a copy of the audited accounts to the Official Liquidator, who will get them audited by a panel auditor. The Official Liquidator must then file a report to the court. 3. The Official Liquidator and Regional Director are permitted to request modifications or recall the order if the accounts are contrary to the sanctioned scheme or Companies Act provisions. 4. The petitioner company must file an affidavit undertaking compliance with these conditions within ten days of receiving the order. The court's decision ensures that the Scheme of Amalgamation is sanctioned while maintaining statutory compliance and protecting the interests of shareholders and the public.
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