2017 (6) TMI 788 - Tri - Companies Law

Scheme of Amalgamation - Held that - Scheme allowed. All the meetings connected with the scheme of equity shareholders, secured and unsecured shareholders of both the companies should be adhered to. In view of Sections 230(4) and 232(1) of the Companies Act, 2013 read with Rules 5 and 6 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 and Rules 20 and 22 of the Companies (Management and Administration) Rules, 2014, the Transferee Company, VISA STEEL LIMITED is required to provide the facility of postal ballot and e-voting to its shareholders. Accordingly, voting by equity shareholders of the Transferee Company to the scheme shall be carried out through (i) postal ballot and e-voting; and (ii) electronic voting system or ballot or polling paper at the venue of the meeting of the equity shareholders of the Transferee Company to be held on 30/06/2017.

Issues Involved:
1. Jurisdiction and transfer of pending proceedings.
2. Consent of secured creditors.
3. Convening meetings of equity shareholders and unsecured creditors.
4. Quorum requirements for meetings.
5. Voting procedures, including postal ballot and e-voting.
6. Compliance with SEBI regulations.
7. Service of notice and publication requirements.

Issue-wise Detailed Analysis:

1. Jurisdiction and Transfer of Pending Proceedings:
The applicants initially filed an application (COPET No. 24 of 2016) before the High Court at Orissa. Due to the Ministry of Corporate Affairs' notification on 7 December 2016, the pending proceedings were to be transferred. However, given the urgency, the applicants filed a new application before the Tribunal and undertook to withdraw the earlier application.

2. Consent of Secured Creditors:
The secured creditors of VISA STEEL LIMITED, accounting for 97.9%, consented to the Scheme in the CDR EG meeting held on 30/12/2014. Similarly, four out of six secured creditors of VISA BAO LIMITED consented to the Scheme in the consortium meeting dated 5/9/2014. State Bank of India, a common secured creditor for both companies, and Daimler Financial Services India Private Limited also provided their consent. Consequently, the meetings of secured creditors for both companies were dispensed with.

3. Convening Meetings of Equity Shareholders and Unsecured Creditors:
The Tribunal ordered the convening of meetings for equity shareholders and unsecured creditors of both VISA STEEL LIMITED and VISA BAO LIMITED on 30/06/2017 at specified times and locations to consider and approve the proposed Scheme of Amalgamation.

4. Quorum Requirements for Meetings:
- For equity shareholders of the Transferee Company: Thirty members present either in person or by proxy.
- For unsecured creditors of the Transferee Company: One-third in number and more than 25% in value of the unsecured debt.
- For equity shareholders of the Transferor Company: Five persons present either in person or by proxy.
- For unsecured creditors of the Transferor Company: One-third in number and more than 25% in value of the unsecured debt.

If the required quorum is not met, the meetings will be adjourned by half an hour, and the persons present will constitute the quorum.

5. Voting Procedures:
The Transferee Company, VISA STEEL LIMITED, must provide postal ballot and e-voting facilities to its shareholders. Voting will be carried out via postal ballot, e-voting, and electronic voting at the meeting venue. Notices and documents will be sent to shareholders and unsecured creditors 30 days before the meeting, and these will also be available on the Transferee Company's website.

6. Compliance with SEBI Regulations:
The Scheme must be approved by public shareholders through postal ballot and e-voting, as per SEBI Circular No. CFD/DIL3/CIR/2017/21 dated 10th March 2017. The Scrutinizer will submit a separate report on the postal ballot and e-voting results for public shareholders.

7. Service of Notice and Publication Requirements:
Notices of meetings and relevant documents must be sent to the Central Government, Registrar of Companies, Income Tax Department, SEBI, BSE, NSE, and other relevant authorities within 10 days of the order. An advertisement about the meetings must be published in 'The Times of India' and 'The Samaja' at least 30 days before the meeting.

The Chairperson and Scrutinizer were appointed for the meetings, with specific remuneration for their services. The Chairperson is responsible for reporting the meeting results within seven days.

Conclusion:
The application was allowed, and Company Application No. 106 of 2017 was disposed of without any order as to costs. Urgent certified copies of the order were to be provided upon compliance with requisite formalities.

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