2019 (11) TMI 1491 - Tri - Companies Law

Approval of Scheme of Amalgamation - section 230-232 of Companies Act - HELD THAT - Tribunal issued directions regarding convening of various meetings, issuance of notices for such meeting and well as dispensing off with various meetings. Application disposed off.

Summary

Issues Involved:
1. Approval of the Scheme of Amalgamation.
2. Jurisdiction of the Tribunal.
3. Business activities and status of registration of the Transferor and Transferee Companies.
4. Justification and benefits of the Scheme of Amalgamation.
5. Dispensation of the requirement of convening meetings for Equity Shareholders, Preference Shareholders, Secured Creditors, and Unsecured Creditors.
6. Service of notice to regulatory authorities.
7. Appointment of Chartered Accountants to assist the Official Liquidator.

Detailed Analysis:

1. Approval of the Scheme of Amalgamation:
The proposed Scheme of Amalgamation involves the amalgamation of Blue Point Leasings Ltd, Gold Rock Metals Ltd, Sugata Investments Ltd, Gold Rock World Trade Ltd, Gold Rock Agro-Tech Ltd, Picanova Investments Pvt Ltd, and Tridhar Finance and Trading Ltd (collectively referred to as "Transferor Companies") with Gold Rock Investments Ltd (referred to as the "Transferee Company"). The Scheme has been approved by the Board of Directors of the Transferor Companies and the Transferee Company in their respective meetings held in June 2019. The Appointed Date for the Scheme is 1st April 2019.

2. Jurisdiction of the Tribunal:
All the Transferor Companies and the Transferee Company have their registered offices in Maharashtra, falling under the jurisdiction of the National Company Law Tribunal (NCLT), Mumbai Bench.

3. Business Activities and Status of Registration:
- The Transferor Companies No. 1, 2, and 5 were engaged in the securities investment business and registered as non-deposit accepting Non-Banking Finance Companies (NBFC) with the Reserve Bank of India (RBI). They have surrendered their Certificates of Registration for cancellation.
- The Transferor Companies No. 3, 4, 6, and 7 were engaged in investment in Mutual Funds, Bank FDRs, shares, and other securities.
- The Transferee Company is engaged in the securities investment business and is registered as a non-deposit accepting NBFC with the RBI.

4. Justification and Benefits of the Scheme of Amalgamation:
The Scheme is justified and necessitated for several reasons:
- Consolidation of Wholly Owned Subsidiaries with their Parent/Holding Company.
- Business synergy and pooling of resources for beneficial utilization.
- Enhanced financial and physical resources for the Transferee Company, providing financial stability beneficial to public shareholders.
- Economies of scale, elimination of duplicate work, reduction in overheads, and improved business efficiency.
- Enhanced shareholders' value and overall growth.

5. Dispensation of the Requirement of Convening Meetings:
- Equity Shareholders: Written consents by way of affidavits have been obtained from all Equity Shareholders of the Transferor Companies No. 1 to 7. The necessity of convening meetings of the Equity Shareholders of the Transferee Company is dispensed with due to the wholly owned subsidiary status and no new shares being issued.
- Preference Shareholders: The sole Preference Shareholder of the Transferor Company No. 6 has given written consent, dispensing the need for a meeting.
- Secured Creditors: There are no Secured Creditors in the Transferor Companies No. 1 to 7. The Transferee Company has one Secured Creditor, and the necessity of convening a meeting is dispensed with.
- Unsecured Creditors: Consents from Unsecured Creditors of the Transferor Companies No. 1 to 7 have been obtained, constituting a significant percentage of the total value. The necessity of convening meetings of the Unsecured Creditors of the Transferee Company is dispensed with.

6. Service of Notice to Regulatory Authorities:
The Applicant Companies are directed to serve notice along with a copy of the Scheme to various regulatory authorities, including the Central Government, Registrar of Companies, Income Tax Department, BSE Ltd, SEBI, and RBI. These authorities may submit their representations within 30 days, failing which it shall be presumed that they have no objections.

7. Appointment of Chartered Accountants to Assist the Official Liquidator:
M/s Jitendra Chablani & Co., Chartered Accountants, are appointed to assist the Official Liquidator in scrutinizing the books of accounts of the Applicant Companies No. 1 to 7 for the last five years and submit a report to the Tribunal. The Applicant Companies are to pay a fee of ?70,000 for this purpose.

Conclusion:
The Tribunal directs the dispensation of convening meetings of Equity Shareholders, Preference Shareholders, Secured Creditors, and Unsecured Creditors of the Transferor and Transferee Companies. The Applicant Companies are to serve notices to regulatory authorities and file affidavits of service. The application is disposed of with the above directions.