2021 (1) TMI 1129 - Tri - Companies Law

Seeking sanction of Scheme of Amalgamation and Arrangement - Section 230-232 of the Companies Act 2013 - HELD THAT - Directions regarding passing of resolutions by transferor and transferee company is issued - various directions regarding holding and dispensation of various meetings issued - directions regarding issuance of various notices issued. The scheme is approved - application allowed.

Summary

Issues Involved:
1. Approval of Scheme of Amalgamation and Arrangement under Sections 230-232 of the Companies Act, 2013.
2. Compliance with legal requirements for merger of Transferor and Transferee Companies.
3. Shareholder, Creditor, and Auditor approvals for the proposed merger.
4. Appointment of Chairperson for conducting meetings and submission of reports.
5. Valuation of shares of the applicant companies.
6. Orders and directions for compliance with regulatory authorities.

Detailed Analysis:

1. Approval of Scheme of Amalgamation and Arrangement: The judgment pertains to two Company Application Nos. filed under Sections 230-232 of the Companies Act, 2013 for the Scheme of Amalgamation and Arrangement of two companies, namely Cochin Surfactants Private Limited (Transferor Company) and Active Char Products Private Limited (Transferee Company). The proposed merger aims to create an efficient structure supporting business growth, simplification of legal entities, cost reduction, shareholder value enhancement, and overall ease of doing business.

2. Compliance with Legal Requirements: The Tribunal noted that both applicant companies are located in the State of Kerala, falling under its jurisdiction. The judgment highlights the incorporation details of the Transferor and Transferee Companies, along with the approval of the Scheme of Merger by their respective Board of Directors.

3. Shareholder, Creditor, and Auditor Approvals: Detailed information is provided regarding the shareholders and creditors of both companies, their attendance and support for the merger scheme, absence of secured creditors in the Transferor Company, and the unanimous approval by shareholders and creditors of the Transferee Company. Additionally, the judgment mentions the submission of audited and unaudited balance sheets, statutory auditor reports, and valuation reports for the shares of both companies.

4. Appointment of Chairperson and Submission of Reports: The judgment discusses the appointment of a Chairperson to conduct meetings of shareholders and creditors, along with the submission of reports by the Chairperson detailing the outcomes of these meetings. The reports indicated unanimous support for the merger scheme from the majority of shareholders and creditors.

5. Valuation of Shares: The judgment highlights the preparation of a Valuation Report for the shares of both applicant companies as required under Section 230 of the Companies Act, 2013. The report was submitted by a Chartered Accountant and Registered Valuer, providing the necessary valuation details.

6. Orders and Directions for Compliance: The judgment concludes with specific orders for the Applicant Companies to send notices to relevant authorities such as the Central Government, Income Tax Authorities, Registrar of Companies, Official Liquidator, and other regulators. The companies are directed to comply strictly with applicable laws, including provisions of the Companies Act, 2013, and the Companies (Compromises, Arrangements, Amalgamations) Rules, 2016 for a successful merger process.

In conclusion, the judgment approves the Scheme of Amalgamation and Arrangement between the Transferor and Transferee Companies, subject to compliance with legal requirements and regulatory authorities, ensuring transparency and adherence to the provisions of the Companies Act, 2013.