2021 (7) TMI 267 - Tri - Companies Law

Approval of scheme of Arrangement - seeking directions regarding meetings of shareholders and creditors in connection with the Scheme of Arrangement between Demerged Company and Resulting Company - section 230-232 of Companies Act - HELD THAT - Various directions regarding holding and convening as well as dispensing of various meetings is issued - directions regarding issuance of various notices issued. The application is allowed.

Issues Involved:
1. Dispensation of meetings of shareholders and creditors.
2. Approval of the Scheme of Arrangement.
3. Compliance with statutory requirements and procedural directives.

Detailed Analysis:

1. Dispensation of Meetings of Shareholders and Creditors:
The application was filed by Kkalpana Industries (India) Limited (Demerged Company) and Ddev Plastiks Industries Limited (Resulting Company) seeking orders regarding meetings of shareholders and creditors concerning their Scheme of Arrangement. The Tribunal noted that the shareholders of the Resulting Company had consented to the Scheme via affidavits, thus dispensing with the need for their meeting. Similarly, since the Resulting Company had no creditors, meetings of creditors were also dispensed with.

2. Approval of the Scheme of Arrangement:
The Scheme of Arrangement provided for the demerger from the Appointed Date, 1st April 2021. The reasons for the demerger included enabling focused management, achieving operational efficiency, attracting new investors, and enhancing valuation. The Tribunal highlighted the necessity of the Scheme, which included separating the Compounding Business Undertaking and the Reprocessing Business Undertaking to optimize profitability and attract strategic investors. The equity shares issued by the Resulting Company would be listed on the BSE, allowing shareholders to manage their investments flexibly.

3. Compliance with Statutory Requirements and Procedural Directives:
The application was filed under Section 230 read with Section 232 of the Companies Act, 2013. The Tribunal noted that the shares of the Demerged Company were listed on BSE Limited and The Calcutta Stock Exchange Ltd., while those of the Resulting Company were not listed. The Board of Directors of both companies had unanimously approved the Scheme. The shareholding patterns and lists of shareholders and creditors were duly certified by Chartered Accountants. The Tribunal emphasized that the Scheme complied with the Accounting Standards prescribed under Section 133 of the Companies Act, 2013. It was also noted that the Scheme did not fall under the purview of the Competition Act, 2002, nor did it involve corporate debt restructuring or compromise with creditors. The Tribunal ensured that no proceedings were pending against the companies under Sections 210 to 217 of the Companies Act, 2013.

Orders and Directions:
The Tribunal ordered the convening of meetings for the equity shareholders and secured and unsecured creditors of the Demerged Company via virtual mode, scheduled for 29th July 2021. The meetings were to be conducted in accordance with the Ministry of Corporate Affairs General Circulars on virtual meetings. Notices for these meetings were to be published in specified newspapers and sent via email to registered shareholders and creditors. The Tribunal appointed a Chairperson and Scrutinizer for these meetings and specified their remuneration. The Tribunal also provided detailed instructions on the quorum, voting procedures, and reporting of meeting results.

The application was disposed of with directions for the applicants to file an affidavit proving service of notices and publication of advertisements at least a week before the meetings. The applicants were also given liberty to file a second motion petition within two weeks from the date of the Chairperson’s report on the meetings. The Tribunal directed the Registry to send email copies of the order to all parties and their counsel and allowed for the issuance of a certified copy of the order upon compliance with requisite formalities.

← Previous Next →