2021 (7) TMI 1015 - Tri - Companies Law

Sanction of the Composite Scheme of Arrangement - Section 230(6) read with Section 232(3) of the Companies Act, 2013 - HELD THAT - Various directions regarding holding and convening of various meetings issued - directions regarding issuance of various notices also issued. The Petitioner(s) shall supply legible print out of the scheme and schedule of assets in acceptable form to the registry and the registry will append such printout, upon verification to the certified copy of the order - petition disposed off.

Issues Involved:
1. Sanction of Composite Scheme of Arrangement under Sections 230(6) and 232(3) of the Companies Act, 2013.
2. Approval of demerger and amalgamation of specified companies.
3. Compliance with statutory requirements and accounting standards.
4. Consideration of objections and representations from regulatory authorities.
5. Issuance and allotment of shares post-amalgamation.
6. Filing of schedule of assets and compliance with procedural requirements.

Issue-wise Detailed Analysis:

1. Sanction of Composite Scheme of Arrangement:
The petition was filed under Section 230(6) read with Section 232(3) of the Companies Act, 2013, seeking sanction for the Composite Scheme of Arrangement involving the demerger of the Non-Current Investment in Share Division of Multiplex Vyapaar Private Limited (Demerged Company) to Argentium International Private Limited (Resulting Company) and the amalgamation of Varsha Tradecom Private Limited (Transferor Company) with Argentium International Private Limited (Transferee Company) effective from 1st April 2019.

2. Approval of Demerger and Amalgamation:
The Scheme was approved by the respective Board of Directors on 16th March 2020. The demerger would enable the Demerged Company to transfer its Non-Current Investment in Share Division to the Resulting Company, eliminating cross-holdings and reducing the number of family-owned companies. The amalgamation would result in economies of scale, better utilization of resources, and increased profitability. The Scheme aimed to establish a larger company with a broader business base and capital.

3. Compliance with Statutory Requirements and Accounting Standards:
The Statutory Auditors confirmed that the accounting treatment in the Scheme complies with Section 133 of the Companies Act, 2013. No proceedings were pending under Sections 210 to 227 of the Act against the Petitioners. The share exchange ratio was determined on a fair and reasonable basis by a Registered Valuer. Meetings of shareholders and creditors were either dispensed with or held virtually due to the COVID-19 pandemic, as per the Tribunal's directions. Compliance with all statutory formalities was confirmed by affidavits.

4. Consideration of Objections and Representations from Regulatory Authorities:
The Regional Director (RD) and Official Liquidator filed their representations. The Official Liquidator reported no complaints against the Scheme and confirmed that the Transferor Company's affairs were not conducted prejudicially. The RD's observations were addressed through a Rejoinder, explaining the justification for the appointed date, compliance with Section 232(3)(i) of the Act, payment of applicable stamp duty, adherence to Accounting Standards, and confirmation of no discrepancies in the Scheme documents. The RD acknowledged that the Petitioners complied with the Tribunal's directions and served notices to all relevant authorities.

5. Issuance and Allotment of Shares Post-Amalgamation:
The Tribunal ordered the issuance and allotment of shares by Argentium International Private Limited (Resulting Company cum Transferee Company) to the shareholders of Multiplex Vyapaar Private Limited (Demerged Company) and Varsha Tradecom Private Limited (Transferor Company) as per the Scheme. The authorized share capital would be increased if necessary.

6. Filing of Schedule of Assets and Compliance with Procedural Requirements:
The schedule of assets related to the Non-Current Investment in Share Division of Multiplex Vyapaar Private Limited and the assets of Varsha Tradecom Private Limited must be filed by Argentium International Private Limited within 60 days of the order. Certified copies of the order must be delivered to the Registrar of Companies, West Bengal, within 30 days of obtaining the Certified Copy.

Conclusion:
The Tribunal sanctioned the Composite Scheme of Arrangement, deeming it bona fide and in the interest of all concerned. The Scheme was to be effective from 1st April 2019, with all properties, rights, liabilities, and duties transferred accordingly. The petition was disposed of, and the parties were instructed to comply with all requisite formalities for obtaining certified copies of the order.

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