2020 (12) TMI 1257 - Tri - Companies Law

Scheme of Amalgamation - seeking holding, convening and dispensation with various meetings - sections 230-232 of the Companies Act, 2013 read with Companies (Compromise, Arrangement and Amalgamations) Rules, 2016 - HELD THAT - Various directions regarding holding, convening and dispensation with various meetings issued - directions regarding issuance of various notices also issued. The scheme is approved - application allowed.

Summary

Issues Involved:
1. Dispensation of meetings for Equity Shareholders, Secured Creditors, and Unsecured Creditors.
2. Approval of Scheme of Amalgamation.
3. Compliance with statutory requirements and regulations.
4. Directions for convening meetings and related procedural aspects.

Detailed Analysis:

1. Dispensation of Meetings for Equity Shareholders, Secured Creditors, and Unsecured Creditors:
- The Applicant Transferor Companies, Bhadra Textiles and Trading Private Limited and Villa Trading Company Private Limited, sought dispensation of meetings for their Equity Shareholders, Secured Creditors, and Unsecured Creditors. The Tribunal granted this request based on the consent affidavits provided and the absence of Secured and Unsecured Creditors.
- The Applicant Transferee Company, Gujarat Sidhee Cement Limited, sought dispensation of the meeting for Secured Creditors, which was granted due to the consent affidavit representing 97.73% of the total outstanding debt.

2. Approval of Scheme of Amalgamation:
- The Scheme of Amalgamation aims to merge the Transferor Companies with the Transferee Company, simplifying the shareholding structure and reducing managerial costs. The promoter group of the Transferor Companies, who are also part of the promoter group of the Transferee Company, will directly hold shares in the Transferee Company post-amalgamation.
- The Tribunal noted that the amalgamation would not alter the financial position of the Transferee Company and that all costs related to the Scheme would be borne by the Transferor Companies' assets or their shareholders.

3. Compliance with Statutory Requirements and Regulations:
- The Applicant Companies confirmed that no investigations or proceedings under Sections 210 to 226 of the Companies Act, 2013 were pending against them.
- The provisions of the Competition Act, 2002 were deemed inapplicable, and no notice to the Competition Commission of India was required.
- The Transferee Company, being a manufacturing company with 100% FDI allowed under the automatic route, did not require approval under FEMA, and no notice to the RBI was necessary.

4. Directions for Convening Meetings and Related Procedural Aspects:
- The Tribunal directed the convening of the meeting of the Equity Shareholders of the Applicant Transferee Company on February 22, 2021, to consider and approve the proposed Scheme.
- Similarly, the meeting of the Unsecured Creditors of the Applicant Transferee Company was scheduled for the same date to discuss and approve the Scheme.
- The Transferee Company, being a listed public limited company, was required to provide e-voting facilities to its shareholders as per SEBI regulations.
- Notices for the meetings were to be published in specified newspapers and sent to the Equity Shareholders and Unsecured Creditors, with details on obtaining copies of the Scheme and related documents.
- Specific individuals were appointed as Chairpersons and Scrutinizers for the meetings, with instructions to issue notices, conduct the meetings, and report the results to the Tribunal.
- The Tribunal ordered compliance with Section 230(5) and Rule 8 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, requiring notices to be sent to relevant authorities like the Central Government, Registrar of Companies, Income Tax authorities, and Official Liquidator, inviting representations within 30 days.

Conclusion:
The Tribunal approved the Scheme of Amalgamation, providing detailed directions for convening meetings of Equity Shareholders and Unsecured Creditors of the Transferee Company, ensuring compliance with statutory requirements, and facilitating the amalgamation process. The Company Application was disposed of accordingly.