2019 (9) TMI 1515 - Tri - Companies Law

Sanction of scheme of Amalgamation - seeking various directions regarding holding and convening of various meetings - section 230-232 of Companies Act - HELD THAT - Both the Transferor Companies are wholly owned subsidiaries of the Applicant Transferee Company and as no compromise is offered by the Applicant Transferee Company under the Scheme of Amalgamation to the creditors and considering the fact that the net worth of the Companies including the Applicant Transferee Company is positive, it is deemed appropriate to order that meetings of the Secured Creditors ( including secured debenture holders) and Unsecured Creditors (including unsecured debenture holders) of the Applicant Transferee Company are not required to be held and are hereby dispensed with. Various direction regarding issuance of various meetings issued - application disposed off.

Summary

Issues Involved:
1. Dispensation of meetings of Equity Shareholders, Secured Creditors, and Unsecured Creditors.
2. Approval of the Scheme of Amalgamation.
3. Compliance with statutory requirements and notifications to regulatory authorities.

Issue-wise Detailed Analysis:

1. Dispensation of Meetings of Equity Shareholders, Secured Creditors, and Unsecured Creditors:
The Applicant Transferee Company, Vodafone Idea Limited, sought dispensation of meetings for its Equity Shareholders, Secured Creditors, and Unsecured Creditors regarding the Scheme of Amalgamation with its wholly-owned subsidiaries, Transferor Company 1 and Transferor Company 2. The Tribunal noted that no new shares would be allotted to the shareholders of the Transferor Companies, and there was no arrangement affecting the rights of the existing shareholders of the Applicant Transferee Company. Additionally, the Scheme did not involve any reorganization of the share capital. Therefore, it was deemed unnecessary to convene a meeting of the Equity Shareholders.

Regarding the Creditors, it was highlighted that the Scheme did not propose any compromise or reduction of liabilities for the Secured or Unsecured Creditors. The financial position as of 31st March 2019 indicated an excess of assets over liabilities for all involved companies, ensuring that the interests of the Creditors were not adversely affected. Consequently, the Tribunal dispensed with the requirement to hold meetings for both Secured and Unsecured Creditors.

2. Approval of the Scheme of Amalgamation:
The Board of Directors of the Applicant Transferee Company approved the Scheme on 13th May 2019. The Scheme aimed at amalgamating Transferor Company 1 and Transferor Company 2 with the Applicant Transferee Company. The Tribunal considered the financial health of the companies, noting that the net worth was positive, and the liabilities of the Creditors would not be reduced or extinguished. The Tribunal relied on precedents where meetings of Creditors were dispensed based on the positive net worth and financial stability of the companies involved. Given these considerations, the Tribunal approved the Scheme of Amalgamation.

3. Compliance with Statutory Requirements and Notifications to Regulatory Authorities:
The Applicant Transferee Company complied with the necessary statutory requirements, including notifying BSE and NSE about the Scheme as per SEBI Circulars. Additionally, the Tribunal directed the Applicant Transferee Company to send notices under Section 230(5) of the Act to various regulatory authorities, including the Central Government, Registrar of Companies, Income Tax Authorities, SEBI, BSE, and NSE. These notices were to include the Scheme of Amalgamation, Explanatory Statement, and necessary disclosures, allowing the authorities 30 days to make any representations.

Conclusion:
The Tribunal concluded that the meetings of Equity Shareholders, Secured Creditors, and Unsecured Creditors were not required due to the absence of any arrangement affecting their rights and the positive financial standing of the companies involved. The Scheme of Amalgamation was approved, and the Applicant Transferee Company was directed to comply with the statutory notification requirements to the relevant regulatory authorities. The Company Application was disposed of accordingly.