2020 (6) TMI 723 - Tri - Companies Law

Approval of scheme of amalgamation - section 230-232 of Companies Act - HELD THAT - Various directions regarding convening and holding of various meetings issued - various directions regarding issuance of various notices required to be issued for various meetings, also issued. The scheme id approved - application allowed.

Summary

Issues Involved:
Amalgamation of companies, approval of scheme, benefits of amalgamation, consent of shareholders and creditors, dispensation of meetings, publication of notice, submission to authorities, appointment of Official Liquidator.

Amalgamation of Companies:
The judgment pertains to a scheme of amalgamation involving three companies - a trading company, a food products and beverages manufacturing company, and another trading company. The scheme aims to merge the two transferor companies with the transferee company. The Board of Directors of each of the applicant companies approved the scheme at their respective meetings.

Approval of Scheme:
The authorized representative for the applicant companies confirmed that the scheme of amalgamation was approved by the Board of Directors of each company. The scheme involves merging the transferor companies with the transferee company and their respective shareholders.

Benefits of Amalgamation:
The authorized representative highlighted several benefits expected from the amalgamation, including consolidation of business operations, efficient resource utilization, enhanced cash management, pooling of resources, operational synergies, and cost savings through operational efficiencies and standardization of expenses.

Consent of Shareholders and Creditors:
The judgment noted that all equity shareholders, preference shareholders, and unsecured creditors of the applicant companies provided their individual consents on affidavit to the proposed scheme. Consequently, the meetings of these stakeholders were dispensed with.

Dispensation of Meetings:
Based on the consents received from shareholders and creditors, the tribunal dispensed with the need for meetings of equity shareholders, preference shareholders, and unsecured creditors. The applicant companies were directed to publish a notice in specified newspapers and serve notices to relevant authorities.

Submission to Authorities:
The applicant companies were directed to serve notices along with a copy of the scheme to the concerned Income Tax Authorities, Central Government, Registrar of Companies, and other regulatory authorities. These authorities were given thirty days to submit any representations on the proposed scheme.

Appointment of Official Liquidator:
The tribunal appointed a firm of Chartered Accountants to assist the Official Liquidator in scrutinizing the books of the transferor companies for the last five years. The appointed firm was directed to file a report, and if no response was received within thirty days, it would be presumed that the Official Liquidator had no objection to the scheme.

This detailed analysis of the judgment provides insights into the process and considerations involved in approving a scheme of amalgamation, ensuring compliance with legal requirements, and safeguarding the interests of stakeholders and regulatory authorities.