2021 (3) TMI 808 - Tri - Companies Law

Seeking sanction of the Scheme of Amalgamation - Sections 230 to 232 of the Companies Act, 2013 - HELD THAT - The meetings of the Equity Shareholders of both the Applicant Companies are dispensed with as their consents by way of affidavits have been received. Meeting of the Preference Shareholders of Transferee Company is dispensed with as their consents by way of affidavit have been received. Meetings of the unsecured creditors of Applicant Companies are dispensed with in view of consents received by way of affidavits. Since, there are no Secured Creditors in both the Applicant Companies, therefore there is nothing to call and convene of their meetings. However, Rule 8 of the Rules requires the notice of the meetings to be sent to the Statutory Authorities in Form CAA 3. Since the calling and convening of the meetings are being dispensed with, the applicants shall have to make a specific prayer while moving the second motion petition to issue the notice to those Statutory Authorities. The First Motion Application stands allowed

Issues Involved:
1. Sanction of the Scheme of Amalgamation under Sections 230 to 232 of the Companies Act, 2013.
2. Approval of the Scheme by the Board of Directors.
3. Share Capital and Incorporation details of the Transferor and Transferee Companies.
4. Shareholders and Creditors' consent.
5. Jurisdiction of the Tribunal.
6. Pending legal proceedings or investigations.
7. Dispensation of meetings for shareholders and creditors.
8. Rationale for the Scheme.
9. Share Entitlement Ratio.
10. Transfer of Legal Proceedings.
11. Compliance with accounting standards.
12. Sectoral regulation and corporate debt restructuring.

Detailed Analysis:

1. Sanction of the Scheme of Amalgamation:
The application was filed under Sections 230 to 232 of the Companies Act, 2013, read with Companies (Compromises, Arrangements, and Amalgamations) Rules, 2016, for the sanction of the Scheme of Amalgamation between Panasonic India Private Limited (Transferor Company) and Panasonic Life Solutions India Private Limited (Transferee Company).

2. Approval of the Scheme by the Board of Directors:
The Board of Directors of both Applicant Companies unanimously approved the Scheme on 14.09.2020.

3. Share Capital and Incorporation Details:
The Transferor Company, originally incorporated as Panasonic Sales and Services Private Limited on 14.07.2006, had its name changed and registered office shifted. The authorised share capital was INR 20,000 million, with issued, subscribed, and paid-up share capital of INR 18,304.88 million as of 31.03.2020. The Transferee Company, initially named Anchor Electricals Private Limited, had its authorised share capital at INR 50,000 million, with issued, subscribed, and paid-up share capital of INR 4,433.1 million as of 31.03.2020.

4. Shareholders and Creditors' Consent:
The Transferor Company had two equity shareholders and 494 unsecured creditors, with 91.21% in value providing consent. The Transferee Company had two equity shareholders, one preference shareholder, and 1579 unsecured creditors, with 90.05% in value providing consent. Both companies had no secured creditors.

5. Jurisdiction of the Tribunal:
The registered offices of both Applicant Companies are situated in Haryana, falling within the territorial jurisdiction of the Tribunal.

6. Pending Legal Proceedings or Investigations:
There were no proceedings or investigations pending under sections 210-217, 219, 220, 223, 224, 225, 226, and 227 of the Companies Act, 2013, against any of the Applicant Companies.

7. Dispensation of Meetings for Shareholders and Creditors:
The Tribunal dispensed with the requirement for convening meetings of equity shareholders, preference shareholders, and unsecured creditors, given the consents received. There were no secured creditors, so no meetings were necessary.

8. Rationale for the Scheme:
The rationale included holistic customer solutions, broad market and sales opportunities, increased value to customers, economies in procurement, reduction in operating and marketing costs, simplification of the group structure, furthering the objects of the companies, and increased value for shareholders.

9. Share Entitlement Ratio:
The Share Entitlement Ratio was determined as 100 equity shares of the Transferee Company for every 70,647 equity shares of the Transferor Company, resulting in the issue of 2,591,034 equity shares.

10. Transfer of Legal Proceedings:
Clause 5.4 of the Scheme stated that all legal, tax, quasi-judicial, administrative, regulatory, or other proceedings by or against the Transferor Company would continue against the Transferee Company.

11. Compliance with Accounting Standards:
Certificates from the Statutory Auditors confirmed that the accounting treatment proposed in the Scheme was in accordance with Section 133 of the Companies Act, 2013, and other generally accepted accounting principles in India.

12. Sectoral Regulation and Corporate Debt Restructuring:
The Applicant Companies were not NBFCs and were not governed by any specific sectoral regulator. The Scheme did not include any reduction of share capital or involve corporate debt restructuring.

Conclusion:
The Tribunal allowed the First Motion Application, granting liberty to file the Second Motion Petition. The Applicant Companies were directed to make specific prayers for sending notices to the Central Government, the Registrar of Companies, the Official Liquidator, and the Income Tax Authorities in the Second Motion Petition.

← Previous Next →