2017 (7) TMI 1309 - Tri - Insolvency and Bankruptcy

Approval of the Scheme of Arrangement by way of Amalgamation - sections 230-232 of Companies Act 2013 - HELD THAT - The application is allowed on various terms.

Issues Involved:
1. Consolidation and amalgamation of telecom businesses.
2. Dispensation of meetings for shareholders and creditors.
3. Compliance with statutory requirements and notices.
4. Approval and objections to the Scheme of Amalgamation.
5. Appointment of Chairpersons and Scrutinizers for meetings.
6. Directions for convening meetings and publication of notices.

Detailed Analysis:

1. Consolidation and Amalgamation of Telecom Businesses:
M/S Telenor (India) Communications Private Limited (Applicant Company 1/Transferor Company) and M/S Bharti Airtel Limited (Applicant Company 2/Transferee Company) decided to amalgamate to achieve objectives like consolidating telecom business, expanding into growing markets, increasing resources and assets, building strong infrastructural capabilities, and enhancing competitive strength and efficiencies. The decisions were made in Board meetings held on 07.03.2017 and 04.03.2017 respectively.

2. Dispensation of Meetings for Shareholders and Creditors:
The applicants sought various reliefs, including dispensing with the requirement of holding meetings for shareholders and creditors. Specifically, they requested:
- Dispensation of the meeting of the shareholders of the Transferor Company due to consents from all equity shareholders.
- Dispensation of the meeting of secured creditors of the Transferor Company as there were none.
- Directions for holding meetings of unsecured creditors and equity shareholders of the Transferee Company.

3. Compliance with Statutory Requirements and Notices:
The Tribunal emphasized compliance with Sections 230-232 of the Companies Act, 2013, and the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. It was noted that notices must be issued to statutory authorities and sectoral regulators as per Section 230(5). The Tribunal refused to dispense with notices to authorities like SEBI, stock exchanges, and the Department of Telecommunications, despite observations from NSE and BSE suggesting otherwise.

4. Approval and Objections to the Scheme of Amalgamation:
An objection was raised by an unsecured creditor of the Transferee Company but was later withdrawn. The Tribunal directed that objections should be raised at the meetings of unsecured creditors rather than at the stage of giving directions for convening meetings.

5. Appointment of Chairpersons and Scrutinizers for Meetings:
The Tribunal appointed Mr. S. Balasubramanian as the Chairperson and Mr. Virender Ganda as the Alternate Chairperson for the meetings of Equity Shareholders and Unsecured Creditors. Mr. Sanjay Grover was appointed as the Scrutinizer. The fees for these appointments were specified, and they were tasked with ensuring proper conduct and reporting of the meetings.

6. Directions for Convening Meetings and Publication of Notices:
The Tribunal issued detailed directions for convening meetings of shareholders and unsecured creditors, including:
- Dispensing with the meeting of equity shareholders of the Transferor Company due to consents.
- Directing meetings for unsecured creditors of the Transferor Company and equity shareholders and unsecured creditors of the Transferee Company.
- Setting quorum requirements and procedures for adjourned meetings.
- Specifying the mode of notice delivery and publication requirements in newspapers.
- Allowing voting in person, by proxy, through postal ballot, or electronic means.
- Directing service of notices to various statutory authorities and regulators.
- Ensuring compliance with all applicable laws and rules.

Conclusion:
The Tribunal allowed the application on the specified terms, ensuring strict compliance with statutory requirements and proper conduct of meetings to consider and approve the Scheme of Amalgamation.

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