2020 (11) TMI 999 - Tri - Companies Law

Scheme of merger - seeking dispensation as well as holding and convening of various meetings - Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 - HELD THAT - Various directions regarding dispensation, holding and convening of various meetings issued - directions regarding issuance of various notices issued. The scheme is sanctioned - application allowed.

Summary

Issues Involved:
1. Dispensation of meetings of Shareholders and Creditors.
2. Approval of the Composite Scheme of Arrangement.
3. Compliance with statutory requirements and procedural directions.

Issue-wise Detailed Analysis:

1. Dispensation of Meetings of Shareholders and Creditors:

The Applicant Companies sought dispensation of meetings for various categories of shareholders and creditors. They requested the dispensation of meetings of Shareholders of all Applicant Companies, Secured Creditors of Applicant Company 1, and Unsecured Creditors of Applicant Companies 2 to 12. The Tribunal noted that Applicant Companies 2 to 12 are wholly owned subsidiaries of Applicant Company 1, and no new shares would be issued under the scheme. The rights of shareholders of Applicant Company 1 are not affected, thus, the meeting of equity shareholders of Applicant Company 1 was dispensed with. Similarly, the consent affidavits of equity shareholders and secured creditors were considered sufficient to dispense with their meetings.

2. Approval of the Composite Scheme of Arrangement:

The proposed Composite Scheme of Arrangement involved the demerger of the Digital Cable TV Business Undertaking from several applicant companies into Applicant Company 1 and the amalgamation of Applicant Companies 11 and 12 with Applicant Company 1. The scheme also included capital reduction in the demerged companies. The Tribunal noted that the scheme had been approved by the Board of Directors of all Applicant Companies and complied with the applicable accounting standards. The scheme did not require prior approval from SEBI as per the relevant circular, and the draft scheme had been filed with SEBI.

3. Compliance with Statutory Requirements and Procedural Directions:

The Tribunal directed the convening of meetings of Unsecured Creditors of Applicant Company 1 and Applicant Company 5. These meetings were to be held through video conferencing, with specific instructions on the publication of notices and advertisements. The Tribunal appointed a Chairperson and a Scrutinizer for these meetings and set a quorum requirement. Notices were to be sent to relevant authorities, including the Central Government, Registrar of Companies, Income Tax Authorities, and stock exchanges, among others, with a 30-day period for representations. The Chairperson was directed to report compliance with these directions and the results of the meetings to the Tribunal.

Conclusion:

The Tribunal granted the dispensation of meetings for shareholders and certain creditors, approved the procedural directions for convening meetings of Unsecured Creditors of Applicant Company 1 and Applicant Company 5, and outlined the necessary compliance steps with statutory requirements. The application was disposed of accordingly.