2020 (10) TMI 497 - Tri - Companies Law

Approval of Scheme of Arrangement - Sections 230 to 232 read with Section 66 and other applicable provisions of the Companies Act, 2013 - HELD THAT - Various meetings dispensed with - various meetings are held and notices issued - the scheme is approved - application allowed.

Issues Involved:
1. Jurisdiction and Authority
2. Scheme of Arrangement
3. Financial Statements and Valuation Reports
4. Rationale for the Scheme
5. Approval and Consent from Stakeholders
6. Pending Proceedings and Investigations
7. Prayer for Dispensation of Meetings
8. Directions for Convening Meetings

Issue-wise Detailed Analysis:

1. Jurisdiction and Authority:
The registered offices of all applicant companies are situated in Vadodara, Gujarat, placing them under the jurisdiction of the National Company Law Tribunal, Ahmedabad Bench.

2. Scheme of Arrangement:
The proposed Scheme of Arrangement involves the demerger of two undertakings of Tash Investment Private Limited (TIPL) into Geetganga Investment Private Limited (GIPL) and Geetganga Properties Private Limited (GPPL). The remaining business of TIPL is to be amalgamated with Shiva Pharmachem Limited (SPL), along with a consequential restructuring of SPL’s equity share capital.

3. Financial Statements and Valuation Reports:
The audited financial statements as of 31st March 2019 and unaudited provisional financial statements as of 31st January 2020 for all companies were submitted. Separate valuation reports for the proposed exchange ratio of shares were provided by M/s. Snehal Shah & Associates, Chartered Accountant and Registered Valuer. TIPL, being an NBFC, obtained prior approval from the Reserve Bank of India for the proposed scheme.

4. Rationale for the Scheme:
The scheme aims to separate strategic investments from other investments, bifurcate investment activities into real estate and other liquid investments, and achieve synergistic integration by merging the remaining business of TIPL with SPL. This will eliminate duplicative communication and coordination efforts and remove cross-holding of shares.

5. Approval and Consent from Stakeholders:
All equity shareholders of the applicant companies have provided written consent via affidavits. The sole secured creditor of TIPL and the absence of secured creditors for GIPL and GPPL were confirmed. SPL has six secured creditors and 638 unsecured creditors, necessitating meetings to obtain their approval.

6. Pending Proceedings and Investigations:
There are no pending proceedings or investigations against the applicant companies under relevant sections of the Companies Act, 2013, or the Companies Act, 1956. No winding-up petitions are pending. Statutory auditors confirmed that the proposed accounting treatments conform to applicable accounting standards.

7. Prayer for Dispensation of Meetings:
The applicant companies requested dispensation of meetings for equity shareholders, secured creditors of TIPL, and unsecured creditors of TIPL, GIPL, and GPPL. They also sought directions to convene separate meetings for the secured and unsecured creditors of SPL.

8. Directions for Convening Meetings:
The tribunal dispensed with the meetings of equity shareholders of all applicant companies and the sole secured creditor of TIPL. Meetings for secured creditors of GIPL and GPPL were deemed unnecessary due to the absence of such creditors. Separate meetings for the secured and unsecured creditors of SPL were directed to be held. Notices for these meetings must be sent at least one month in advance, and advertisements must be published in specified newspapers. The tribunal appointed Mr. Suresh Sisodia as the chairman and Mr. Devesh Pathak as the scrutinizer for these meetings. Voting will be conducted through ballot/polling paper at the venue.

Conclusion:
The tribunal allowed the application, directing the applicant companies to comply with the procedural requirements for convening meetings and notifying relevant authorities. The scheme of arrangement was approved, subject to the conditions and directions outlined in the judgment.

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