2021 (8) TMI 9 - Tri - Companies Law

Approval of scheme of amalgamation - Section 230-232 of the Companies Act, 2013 - HELD THAT - Section 230(i) of Companies Act, 2013 contemplates holding of meeting unless 90% of the Creditors gave consent by way of Affidavits to dispense with meetings. In this case, the shareholders and unsecured creditors of the Transferor Company and secured creditors of the Transferee Company have given consent by. way of Affidavits to dispense with meetings Applicant Companies. Section 230(9) of Companies Act, 2013 provides that 90% of the Creditors to give consent for dispensing with convening of meeting. Therefore, the request of the 1st Applicant Company and 4th Applicant Company for conveying meeting unsecured creditors is considered. The meetings are to be convened and held in the manner mentioned below. Various directions regarding convening and dispensation of various meetings issued - various directions regarding issuance of notices also issued. The scheme is approved - application allowed.

Issues Involved:
1. Dispensation and convening of meetings for Equity Shareholders, Secured Creditors, and Unsecured Creditors.
2. Rationale and purpose of the Composite Scheme of Arrangement.
3. Compliance with accounting standards and valuation report.
4. Declaration and investigation status of the Applicant Companies.
5. Reliefs sought by the Applicant Companies.

Detailed Analysis:

1. Dispensation and Convening of Meetings:
The Applicant Companies sought relief under Section 230-232 of the Companies Act, 2013, to dispense with the meetings of Equity Shareholders and Secured Creditors for all Applicant Companies. They requested to convene meetings of Unsecured Creditors for the First and Fourth Applicant Companies. The Tribunal ordered:
- Dispensation of meetings for Equity Shareholders and Secured Creditors.
- Convening meetings of Unsecured Creditors for the First and Fourth Applicant Companies on 21st August 2021 via Video Conferencing (VC)/Other Audio-Visual Means (OAVM).
- Appointed Satyasiri Atluri as Chairman and Ms. Anantha Lakshmi as Scrutinizer for these meetings.
- Fixed the quorum for the First Applicant Company’s meeting at 3 Unsecured Creditors and for the Fourth Applicant Company’s meeting at 25 Unsecured Creditors.

2. Rationale and Purpose of the Composite Scheme of Arrangement:
The restructuring aimed to consolidate the information technology business under one entity, leading to operational synergies, efficient administration, and enhanced focus on business operations. Benefits included:
- Strengthening leadership in the pharmaceutical industry.
- Creation of economies of scale.
- Delinking distinct businesses for focused strategy and specialization.
- Simplification of shareholding structure and reduction of tiers for greater transparency.

3. Compliance with Accounting Standards and Valuation Report:
The Tribunal noted compliance with applicable Indian Accounting Standards as certified by K.S. Rao & Co. and BSR & Associates LLP. The valuation report by Mr. V. Gangadhara Rao was annexed to the application, ensuring the proposed scheme's financial integrity.

4. Declaration and Investigation Status of the Applicant Companies:
The Applicant Companies declared no ongoing investigations or proceedings against them. They confirmed their status as private, unlisted companies.

5. Reliefs Sought by the Applicant Companies:
The Tribunal granted the following reliefs:
- Dispensed with meetings for Equity Shareholders and Secured Creditors.
- Convened meetings for Unsecured Creditors of the First and Fourth Applicant Companies.
- Directed publication of meeting notices in specified newspapers.
- Ordered serving notices to relevant authorities including the Regional Director, Registrar of Companies, Income Tax Authority, and Official Liquidator.
- Empowered the Chairmen with procedural authority for conducting meetings and reporting outcomes.

The Tribunal's order ensured compliance with statutory requirements, facilitating the proposed Composite Scheme of Arrangement while safeguarding stakeholders' interests.

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