2020 (12) TMI 917 - Tri - Companies Law

Approval of Amalgamation Scheme - Section 230-232 of Companies Act, 2013 - seeking the dispensation of the meeting of shareholders of the Transferor Company, M/s. Trion Chemicals Private Limited and Transferee Company M/s. Bodal Chemicals Limited - seeking the dispensation for the meeting of Secured Creditor of Applicant Transferor Company no. 1 - seeking the direction for convening the meetings of Secured Creditor of Applicant Transferee Company no. 2 and Secured and Unsecured Applicant Transferor Company No. 1. HELD THAT - Various directions regarding dispensation and holding of various meetings issued - directions regarding issuance of notices also issued. Application disposed off.

Issues Involved:
1. Dispensation of meetings for shareholders and creditors.
2. Approval and consideration of the Scheme of Amalgamation.
3. Compliance with SEBI and legal requirements.
4. Conduct of meetings through video conferencing and e-voting.
5. Notification and advertisement of meetings.
6. Appointment of Chairman and Scrutinizer for meetings.
7. Reporting and compliance with Tribunal directions.

Issue-wise Detailed Analysis:

1. Dispensation of Meetings for Shareholders and Creditors:
The application sought dispensation of the meeting of shareholders of the Transferor Company, M/s. Trion Chemicals Private Limited, and the Transferee Company, M/s. Bodal Chemicals Limited. It also sought dispensation for the meeting of Secured Creditors of the Transferor Company and directions for convening meetings of Secured and Unsecured Creditors of the Transferee Company.

2. Approval and Consideration of the Scheme of Amalgamation:
The Scheme of Amalgamation was placed before the Audit Committee and the Board of Directors of both companies. The Board of Directors of the Applicant Companies passed resolutions to submit the Scheme to the Tribunal for sanction after obtaining approval from concerned stock exchanges. The Scheme aimed to achieve business and operational synergies, simplify management structure, reduce legal and regulatory compliances, and simplify shareholding structure.

3. Compliance with SEBI and Legal Requirements:
The Transferee Company, being a listed public limited company, was governed by SEBI Circular No. CFD/DIL3/CIR/2017/21 dated March 10, 2017. The Scheme provided for the merger of a wholly-owned subsidiary with the parent company, hence no shares were required to be issued as consideration. The Scheme was not required to undergo valuation, but a voluntary valuation report was obtained.

4. Conduct of Meetings through Video Conferencing and E-Voting:
In light of the COVID-19 pandemic, the Tribunal directed that all meetings of Secured and Unsecured Creditors of the Applicant Transferee Company and the Unsecured Creditors of the Applicant Transferor Company be conducted through video conferencing or other audio-visual means. The Applicant Companies were instructed to appoint a Depository and other required agencies to facilitate the meetings and e-voting.

5. Notification and Advertisement of Meetings:
The Tribunal ordered that notices in Form No. CAA 2, along with the Scheme of Arrangement and Explanatory Statement, be sent to each Secured and Unsecured Creditor of the Applicant Transferee Company and the Unsecured Creditors of the Applicant Transferor Company. Advertisements about the meetings were to be published in specified newspapers, indicating the details and modalities for the meetings through video conferencing.

6. Appointment of Chairman and Scrutinizer for Meetings:
The Tribunal appointed Shri Firoj Gaffarbhai Bodla, an independent practicing Chartered Accountant, as the Chairman of all meetings, with alternatives in case of his unavailability. Shri Tapan Shah, a practicing Company Secretary, was appointed as the Scrutinizer for the meetings.

7. Reporting and Compliance with Tribunal Directions:
The Chairman was directed to file an affidavit at least seven days before the meetings, confirming compliance with the directions regarding issuance of notices and advertisements. The result of the meetings was to be reported to the Tribunal in Form No. CAA 4 within 30 days of the conclusion of the last meeting. Notices in Form No. CAA 3 were to be sent to various authorities, including the Central Government, Registrar of Companies, Income Tax Authorities, RBI, BSE, NSE, SEBI, and the Official Liquidator, inviting representations within 30 days.

Conclusion:
The Tribunal allowed the application, directing the convening of meetings through video conferencing, appointment of a Chairman and Scrutinizer, issuance of notices and advertisements, and compliance with SEBI and legal requirements. The Scheme of Amalgamation was to be considered and approved by the respective creditors and shareholders as per the specified modalities.

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