2020 (2) TMI 1467 - Tri - Companies Law

Approval of scheme of Amalgamation - Sections 230 to 232 and other provisions of the Companies Act, 2013 R/w the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT - Various directions for holding and convening of various meetings issued - various directions regarding issuance of various notices in regard to the meetings, also issued. Application disposed off.

Issues Involved:
1. Dispensation of meetings of equity shareholders of Transferor Companies.
2. Directions for convening the meeting of equity shareholders of Transferee Company.
3. Compliance with the Companies Act, 2013 and relevant rules.
4. Certification of the scheme of amalgamation by statutory auditors.
5. Approval of the scheme of amalgamation by the Board of Directors and shareholders.
6. Appointment of Chairperson and Scrutinizer for the meeting of equity shareholders of the Transferee Company.

Issue-wise Detailed Analysis:

1. Dispensation of Meetings of Equity Shareholders of Transferor Companies:
The Applicant Companies sought to dispense with the meetings of the equity shareholders of the Transferor Companies. The Transferor Companies (M/s. U.D Polyproducts Private Limited, M/s. Bemco Precitech Private Limited, and M/s. UD Finnvest Private Limited) each had their shareholders provide affidavits consenting to the proposed scheme of amalgamation. The affidavits indicated that greater than 90% by value of the total shareholding had no objection to dispensing with the meetings. The Tribunal, noting the compliance with the necessary provisions and the unanimous consent, granted the dispensation of these meetings.

2. Directions for Convening the Meeting of Equity Shareholders of Transferee Company:
The Tribunal directed that the meeting of the equity shareholders of the Transferee Company (M/s. Sri Ramachandra Enterprises Private Limited) be convened. The meeting was scheduled for 10th April 2020, with specific instructions regarding the quorum, publication of the meeting notice in designated newspapers, and the appointment of a Chairperson and Scrutinizer. The Tribunal appointed Shri Manjunath S. as Chairperson and Shri Nagendra D. Rao as Scrutinizer, with specified remuneration for their roles.

3. Compliance with the Companies Act, 2013 and Relevant Rules:
The Tribunal carefully reviewed the pleadings and submissions, ensuring that the Applicant Companies adhered to the extant provisions of the Companies Act, 2013, and the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. The Tribunal emphasized the need for the Applicant Companies and the appointed officials to follow all statutory requirements in convening the meetings.

4. Certification of the Scheme of Amalgamation by Statutory Auditors:
The Statutory Auditors of the Transferor and Transferee Companies issued certificates confirming that the accounting treatment in the scheme of amalgamation complied with AS-14, as notified under Section 133 of the Companies Act, 2013. The Tribunal acknowledged these certifications as part of the compliance process.

5. Approval of the Scheme of Amalgamation by the Board of Directors and Shareholders:
The Board of Directors of both the Applicant Companies unanimously approved the proposed scheme in their respective meetings held on 31st July 2019. The Tribunal noted that the scheme was made in the best interests of the companies and their shareholders, with all material facts disclosed and necessary documents filed.

6. Appointment of Chairperson and Scrutinizer for the Meeting of Equity Shareholders of the Transferee Company:
The Tribunal appointed Shri Manjunath S. as Chairperson and Shri Nagendra D. Rao as Scrutinizer for the meeting of the equity shareholders of the Transferee Company. The Tribunal specified their remuneration and directed them to file their reports within ten days post-meeting. The Applicant Companies were granted two weeks to file an appropriate company petition seeking sanction of the scheme, subject to statutory compliance.

Conclusion:
The Tribunal disposed of CA (CAA) No. 14/BB/2020 with specific directions, including the dispensation of meetings for the Transferor Companies and the convening of a meeting for the Transferee Company’s equity shareholders. The Tribunal ensured compliance with the Companies Act, 2013, and relevant rules, and appointed officials to oversee the process, thereby facilitating the approval of the proposed scheme of amalgamation.

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