2017 (10) TMI 1566 - Tri - Companies Law

Approval of scheme of Amalgamation - Sections 230 to 232 and 234 of the Companies Act, 2013 - HELD THAT - The Applicant Company is directed to serve notices along with the documents as mentioned. The Applicant Company submits that the Scheme is an inbound merger in relation to the merger of the Transferor Company 1 and the Transferor Company 2 with the Transferee Company under the provisions of Sections 230 to 232 and 234 of the Companies Act, 2013. The Transferor Company was incorporated on 29th day of March, 2016 under the provisions of Mauritius Companies Act, 2001. The Applicant Company shall file the affidavit of service in the Registry that directions contained in clause 7 have been complied with.

Summary

Issues Involved:
Scheme of Amalgamation of wholly owned subsidiary companies under Companies Act, 2013.

Analysis:
The judgment delivered by the National Company Law Tribunal, Mumbai Bench, involved a Scheme of Amalgamation of two wholly owned subsidiary companies, namely Transferor Company 1 and Transferor Company 2, with their holding company, the Applicant Company, under Sections 230 to 232 and 234 of the Companies Act, 2013. The Applicant Company, engaged in the fast-moving consumer goods market, sought to streamline its group structure by reducing legal entities, regulatory compliances, communication efforts, and costs through the proposed Scheme. The Scheme aimed to merge the subsidiary companies into the holding company without issuing new shares or diluting public shareholders' holdings. The net worth of the Applicant Company was significantly positive, ensuring its ability to discharge liabilities post-merger without compromising shareholders' or creditors' interests.

The Applicant Company contended that no reconstruction or arrangement with shareholders or creditors was involved in the proposed Scheme, citing a previous Tribunal ruling. Therefore, no shareholders' or creditors' meetings were necessary for approval. The Applicant Company committed to filing the necessary petition and serving notices to regulatory authorities, including submission of relevant documents and reports to concerned authorities for representations within a specified timeframe. The Scheme was characterized as an inbound merger under the Companies Act, 2013, requiring approval from the Reserve Bank of India before the final hearing of the Company Petition. Compliance with the Tribunal's directions, including filing an affidavit of service, was mandated to proceed with the proposed Scheme.

In conclusion, the judgment detailed the intricacies of the Scheme of Amalgamation, emphasizing compliance with legal provisions, regulatory requirements, and the protection of stakeholders' interests throughout the merger process. The Tribunal's decision underscored the importance of transparency, due diligence, and adherence to statutory procedures in corporate restructuring activities to ensure fairness and legality in such transactions.