2015 (8) TMI 380 - HC - Companies Law

Scheme of Amalgamation Dispensing convening of meetings of equity shareholders, secured and unsecured creditors to consider and approve, proposed Scheme of Amalgamation under Section 391(1) of Companies Act, 1956 Held that - board of directors of transferor and transferee companies in their separate meetings unanimously approved proposed Scheme of Amalgamation Equity shareholders and unsecured creditor of transferor and transferee companies have given their consents/no objections in writing to proposed Scheme of Amalgamation and were found in order Application stands allowed Decided in favour of applicants

Summary

Issues: Joint application under Section 391(1) of the Companies Act, 1956 seeking directions to dispense with the requirement of convening meetings of equity shareholders, secured and unsecured creditors for the proposed Scheme of Amalgamation.

Analysis:
1. The joint application was filed under Section 391(1) of the Companies Act, 1956, by the applicant companies to seek directions to dispense with the need to convene meetings of equity shareholders, secured, and unsecured creditors for the proposed Scheme of Amalgamation involving three companies.

2. The transferor company no. 1, initially incorporated as Targett Bristlers Private Limited, then changed its name to Avanti Bristlers Private Limited and shifted its registered office to Delhi. Transferor company no. 2, originally Grassmore Tea Limited, changed its name to Grassmore Products Private Limited and also moved its registered office to Delhi. The transferee company, Marble Trading Co. Limited, rebranded as W.H. Targett India Limited and shifted its registered office to Delhi as well.

3. Details of the authorized share capital and the issued, subscribed, and paid-up share capital of all three companies were provided in the application.

4. The application included copies of the Memorandum and Articles of Association of the companies, along with the audited balance sheets as of 31st March, 2014, and the Scheme of Amalgamation highlighting the benefits such as pooling of expertise, financial resources, and operational cost savings.

5. The Scheme outlined the share exchange ratio for the amalgamation, specifying the number of equity shares of the transferee company to be issued for each share held in the transferor companies.

6. It was confirmed that no proceedings under Sections 235 to 251 of the Companies Act, 1956 were pending against the applicant companies.

7. Resolutions approving the proposed Scheme of Amalgamation were passed unanimously by the Board of Directors of all three companies in separate meetings.

8. Consents and no objections from equity shareholders and creditors of the companies were obtained and found in order, leading to the dispensation of the requirement to convene meetings for approval of the Scheme.

9. The application was allowed in the stated terms, granting the requested directions to dispense with the meetings of equity shareholders and creditors for the proposed Scheme of Amalgamation.