2021 (6) TMI 693 - Tri - Companies Law

Approval of scheme of Merger - Section 230 to 232 and other applicable provisions of the Companies Act, 2013 - HELD THAT - Various directions regarding holding and convening of various meetings were issued - various directions regarding issuance of various SCN for the meetings to be held, were also issued - Application allowed - the scheme is approved.

Summary

Issues:
1. Joint application under Sections 230 to 232 of the Companies Act, 2013 for the merger of three companies.
2. Approval of the Scheme of Amalgamation by the Board of Directors.
3. Benefits of the proposed merger outlined in the application.
4. Valuation report and Scheme of Merger submission.
5. Confirmation of no pending investigations against the Applicant Companies.
6. Relief sought regarding dispensation of meetings of Equity Shareholders and Creditors.
7. Order of the Tribunal regarding dispensation of meetings and compliance with statutory requirements.

Analysis:
1. The joint application filed under Sections 230 to 232 of the Companies Act, 2013 pertains to the merger of three companies, namely Glorious Yarns Private Limited, Harmony Prints Private Limited, and Shanu Tex And Developers Private Limited. The application includes the Memorandum of Association, Financial Statements, and Board Resolutions of the Applicant Companies, establishing the legal basis for the proposed merger.

2. The Board of Directors of all Applicant Companies have duly approved the Scheme of Amalgamation, highlighting the internal authorization and consent required for such a significant corporate action. This approval signifies compliance with corporate governance norms and procedures.

3. The application outlines various benefits anticipated from the proposed merger, including the formation of a larger company for enhanced growth opportunities, rationalization of management and finances, reduction of overheads, and optimization of resources. These benefits are crucial for justifying the merger under the provisions of the Companies Act, 2013.

4. The submission of a Valuation Report and the Scheme of Merger is a critical step in the merger process to ensure transparency and fairness in determining the equity share exchange ratio and outlining the operational framework post-merger. These documents provide a financial and legal basis for the merger.

5. Confirmation of no pending investigations against the Applicant Companies under relevant provisions of the Companies Act, 2013 is essential to establish the legal compliance and integrity of the companies involved in the merger. This confirmation ensures that the merger process is not encumbered by any ongoing legal issues.

6. The Applicant Companies sought relief for dispensation of meetings of Equity Shareholders and Creditors based on the consent received through affidavits. The submission of certificates from Chartered Accountants confirming the absence of secured and unsecured creditors in some companies further supports the request for dispensation of meetings, streamlining the merger process.

7. The Tribunal's order regarding the dispensation of meetings of Equity Shareholders and Creditors aligns with the submissions made by the Applicant Companies, emphasizing compliance with legal requirements and the efficient conduct of the merger process. Additionally, the order mandates compliance with statutory provisions for notifying relevant authorities and stakeholders about the proposed merger, ensuring transparency and regulatory adherence in the merger process.