2017 (6) TMI 1378 - Tri - Companies Law

Composite Scheme of Arrangement between Aditya Birla Nuvo Limited Grasim Industries Limited and Aditya Birla Financial Services Limited and their respective shareholders and creditors (Scheme) - change of shareholding pattern HELD THAT - Considering the entire facts and circumstances of the case and on perusal of the Scheme and the proceedings it appears that the requirements of the provisions of sections 230-232 of the Companies Act 2013 are satisfied. The Scheme is genuine and bona fide and in the interest of the shareholders and creditors. I therefore accordingly allow the Company Petitions and approve the Scheme.

Summary

Issues Involved:
1. Sanctioning of the Composite Scheme of Arrangement.
2. Compliance with Tribunal's directions for convening and holding meetings.
3. Modifications due to changes in shareholding patterns.
4. Compliance with SEBI Circular and FEMA/RBI guidelines.
5. Observations and representations from the Regional Director and Official Liquidators.
6. Impact of the non-convening of meetings of preference shareholders.

Issue-wise Detailed Analysis:

1. Sanctioning of the Composite Scheme of Arrangement:

The petitions sought the Tribunal's sanction for the Composite Scheme of Arrangement between Aditya Birla Nuvo Limited, Grasim Industries Limited, and Aditya Birla Financial Services Limited. The Scheme was approved by the requisite statutory majority of Equity Shareholders, Secured Creditors, and Unsecured Creditors through meetings held as directed by the Tribunal. The Tribunal found the Scheme to be genuine, bona fide, and in the interest of shareholders and creditors, thus sanctioning it and binding all concerned parties.

2. Compliance with Tribunal's Directions for Convening and Holding Meetings:

Separate meetings of Equity Shareholders, Secured Creditors, and Unsecured Creditors were held for Aditya Birla Nuvo Limited and Grasim Industries Limited. Aditya Birla Financial Services Limited sought to dispense with meetings for Preference Shareholders due to changes in shareholding. Notices for these meetings were sent individually and advertised in newspapers as directed. The meetings resulted in approval by the requisite majority, and the Chairmen of the meetings filed the necessary affidavits and reports with the Tribunal.

3. Modifications Due to Changes in Shareholding Patterns:

Aditya Birla Financial Services Limited filed an application to modify the Tribunal's order due to changes in shareholding patterns, including the conversion of preference shares to equity shares and redemption of other preference shares. The Tribunal allowed these changes to be recorded at the time of filing the petition or in the Chairman's report. The Tribunal concluded that these changes did not affect the voting outcomes or the implementation of the Scheme.

4. Compliance with SEBI Circular and FEMA/RBI Guidelines:

The Regional Director's representation required compliance with SEBI Circular No. CIR/CFD/CMD/16/2015 and FEMA/RBI guidelines. The petitioners confirmed compliance with the SEBI Circular and stated that necessary RBI approvals would be obtained if required. The Tribunal found these responses satisfactory and concluded that the observations of the Regional Director were addressed.

5. Observations and Representations from the Regional Director and Official Liquidators:

The Regional Director and Official Liquidators from Gujarat and Madhya Pradesh filed representations. The petitioners responded to these observations, confirming compliance with relevant laws, including the Companies Act, Income Tax Act, and ensuring the preservation of books and records. The Tribunal found these responses satisfactory and concluded that the observations were adequately addressed.

6. Impact of the Non-Convening of Meetings of Preference Shareholders:

The Tribunal considered whether the non-convening of meetings of preference shareholders by Aditya Birla Financial Services Limited affected the Scheme's implementation. The affidavit filed by the Company Secretary clarified that the changes in shareholding did not impact the voting results or the Scheme's implementation. The Tribunal concluded that these aspects would not hinder the Scheme's sanctioning.

Conclusion:

The Tribunal, after considering all facts, representations, and compliance with legal requirements, sanctioned the Composite Scheme of Arrangement. The Scheme was deemed binding on all involved parties, and Aditya Birla Nuvo Limited was directed to stand dissolved without winding up upon the Effective Date. The petitions were allowed, and fees for the Official Liquidators were quantified and directed to be paid by the respective companies. The Tribunal dispensed with the filing and issuance of drawn-up orders, directing all concerned authorities to act on the authenticated order and Scheme.