2019 (5) TMI 482 - Tri - Companies Law

Scheme of De-merger of company - Filing of detailed working of the share exchange ratio - convening and holding meeting of equity shareholders - issuance and publication of notice of the said meeting - HELD THAT - The learned counsel for the Applicant Company has also represented that the Applicant Company has filed financial statements as on 31.03.2018 as Annexure A-4. CA No. 49/2019 was filed for placing on record the unaudited provisional financial statements as on 30.09.2018 in respect of the Applicant Company as at Annexure A-59 - the directions are issued with respect to calling, convening and holding of meetings of the shareholders, secured and unsecured creditors or dispensing with the same as well as issue of notices including by way of paper publication. First Motion Petition stands disposed of.

Issues Involved:
1. Compliance with previous order dated 29.01.2019.
2. Scheme of Arrangement/Demerger under Sections 230 and 232 of the Companies Act, 2013.
3. Approval and authorization by the Board of Directors.
4. Details of the Applicant Company and its business.
5. Share exchange ratio and financial details.
6. Jurisdiction and procedural compliance.
7. Meetings of shareholders and creditors.
8. Appointment of Chairperson, Alternate Chairperson, and Scrutinizer.
9. Issuance of notices and publication requirements.
10. Voting and reporting of meeting results.
11. Compliance with statutory and regulatory requirements.

Detailed Analysis:

1. Compliance with Previous Order:
The application CA No. 106/2019 was filed in compliance with the order dated 29.01.2019 to provide detailed working of the share exchange ratio and the order dated 18.01.2019 by the National Company Law Tribunal, New Delhi. The application was supported by an affidavit from the Company Secretary and was allowed, with documents taken on record.

2. Scheme of Arrangement/Demerger:
The Scheme involves the demerger of certain business undertakings of GE India Industrial Private Limited into six resulting companies, including the Applicant company, Grid Equipments Private Limited. The Scheme is filed under Sections 230 and 232 of the Companies Act, 2013, and the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. The Scheme aims to streamline business operations, enhance management control, and create value for stakeholders.

3. Approval and Authorization by the Board of Directors:
The Board of Directors of the Applicant Company unanimously approved the Scheme on 28.11.2018. The resolution authorized any Director or the Company Secretary to take necessary steps, including filing applications and petitions. The affidavit in support of the application was filed by the Company Secretary.

4. Details of the Applicant Company and its Business:
The Applicant company, incorporated on 29.12.2010, is a Non-Banking Financial Company engaged in holding investments in group companies. It does not require registration from the Reserve Bank of India. The authorized, issued, subscribed, and paid-up share capital details were provided, showing no changes since 31.03.2018.

5. Share Exchange Ratio and Financial Details:
The share exchange ratio proposed is for every 700 equity shares of GE India Industrial Private Limited, 1 equity share of Grid Equipment Pvt. Ltd. will be issued. Financial statements as of 31.03.2018 and unaudited provisional financial statements as of 30.09.2018 were filed. The Statutory Auditor certified that the accounting treatment specified in the Scheme conforms to the applicable accounting standards.

6. Jurisdiction and Procedural Compliance:
The registered office of the Applicant company is in Gurugram, Haryana, falling within the Tribunal's jurisdiction. No proceedings are pending under the Companies Act against the Applicant and Non-Applicant companies. No investigation has been instituted under Chapter XIV of the Companies Act, 2013.

7. Meetings of Shareholders and Creditors:
The application sought orders for convening and holding meetings of equity shareholders and unsecured creditors, and dispensing with the meeting of secured creditors. The equity shareholders and unsecured creditors' meetings were scheduled for 20.04.2019, with specific quorum requirements.

8. Appointment of Chairperson, Alternate Chairperson, and Scrutinizer:
Mr. Justice Arvind Kumar (Retd.) was appointed as the Chairperson, Ms. Eshna Kumar, Advocate, as the Alternate Chairperson, and CS Mr. Surinder Kumar Jolly as the Scrutinizer for the meetings. Their fees and expenses were to be borne by the Applicant company.

9. Issuance of Notices and Publication Requirements:
Individual notices of the meetings were to be sent 30 days in advance through registered post, speed post, courier, or email. Notices were also to be published in "Financial Express" and "Jansatta" newspapers and on the company's website, if any.

10. Voting and Reporting of Meeting Results:
Voting on the Scheme was allowed in person, by proxy, electronically, or by postal ballot. The Chairperson was to report the meeting results to the Tribunal in Form No. CAA-4 within seven days, assisted by the Company Secretary and Scrutinizer.

11. Compliance with Statutory and Regulatory Requirements:
Notices in Form No. CAA-3, along with the Scheme and explanatory statement, were to be sent to various statutory authorities, including the Central Government, Registrar of Companies, Income Tax Department, and Reserve Bank of India. The Applicant company was to furnish a copy of the Scheme free of charge upon request and file affidavits of service and compliance with all directions.

Conclusion:
The Tribunal issued detailed directions for convening and holding meetings of shareholders and creditors, appointing officials to oversee the process, and ensuring compliance with statutory and regulatory requirements. The First Motion Petition was disposed of with these directions, and a copy of the order was to be supplied to the concerned parties.

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