2016 (6) TMI 806 - HC - Companies Law

Scheme of Amalgamation - Held that - The present scheme of amalgamation is in the interest of its shareholders and creditors as well as in the public interest and the same deserves to be sanctioned. The Scheme is hereby sanctioned.

Summary

Issues:
Petitions for sanction of amalgamation scheme under sections 391 to 394 of the Companies Act, 1956.

Detailed Analysis:
1. Purpose of Amalgamation: The petitions were filed by four companies seeking approval for the amalgamation of three transferor companies with the transferee company to achieve synergic benefits by consolidating and integrating resources to reduce operational and administrative costs.

2. Shareholders and Creditors Approval: Shareholders' meetings for the transferor companies were dispensed with as written consent letters were obtained from all, while unsecured creditors unanimously approved the scheme in their respective meetings. Similar approval was obtained from equity shareholders and unsecured creditors of the transferee company.

3. Official Liquidator's Report: The Official Liquidator found that the transferor companies operated within their object clauses and did not act prejudicially. The companies were directed to preserve books of accounts and records post-amalgamation, ensuring compliance with statutory liabilities.

4. Observations by Regional Director: The Regional Director raised concerns regarding discrepancies in addresses, delayed financial filings, accounting treatment compliance, and communication with the Income Tax Department. The court addressed each concern, finding no substantial issues that would hinder the amalgamation process.

5. Sanction of Scheme: After considering all contentions, affidavits, and undertakings, the court concluded that the amalgamation scheme was in the interest of shareholders, creditors, and the public. The scheme was sanctioned, and relevant prayers in the petitions were granted.

6. Costs and Directions: Costs payable to the Central Government Standing Counsel and the Office of the Official Liquidator were quantified. The petitioner companies were directed to lodge necessary documents, file orders with relevant authorities, and expedite the process without the need for a drawn-up order.

7. Conclusion: The judgment approved the amalgamation scheme, ensuring compliance with legal requirements and addressing concerns raised by regulatory authorities. The detailed analysis covered all aspects of the petitions, approvals, objections, and post-amalgamation obligations to safeguard the interests of stakeholders and ensure a smooth transition.