2021 (11) TMI 955 - Tri - Companies Law

Sanction of Scheme of Amalgamation - Section 230 read with Section 232 of the Companies Act, 2013 - HELD THAT - From the material on record, the Scheme appears to be fair and reasonable and is not violative to any provisions of law, nor is contrary to public interest. Since all requisite compliance has been fulfilled, the scheme is sanctioned - application allowed.

Issues Involved:
1. Scheme of Amalgamation and its justification.
2. Compliance with statutory requirements and accounting standards.
3. Observations and compliance as per Regional Director and Official Liquidator.
4. Shareholding changes and disclosure requirements.
5. Pending proceedings and service of notices to authorities.
6. Approval and binding nature of the Scheme.

Detailed Analysis:

1. Scheme of Amalgamation and its Justification:

The petition was filed under Section 230 read with Section 232 of the Companies Act, 2013 for the sanction of the Scheme of Amalgamation between Lesha Commercial Pvt. Ltd., Adirish Properties Private Limited, and Acme Chem Ltd. The Scheme was approved by the respective Board of Directors on 1st September 2020. The amalgamation aims to enable optimal utilization of resources, achieve business synergies, market access, unified platform for growth, cost-effectiveness, and simplified corporate structure. The amalgamation will also result in the dissolution of the Transferor Companies, reducing regulatory and legal compliance obligations.

2. Compliance with Statutory Requirements and Accounting Standards:

The statutory Auditor of the Transferee Company confirmed that the accounting treatment in the Scheme is in conformity with the accounting standards prescribed under Section 133 of the Companies Act, 2013. No proceedings are pending under Sections 210 to 227 of the Companies Act, 2013 against the Petitioners. A report from a Registered Valuer on the fair share exchange ratio is annexed to the petition.

3. Observations and Compliance as per Regional Director and Official Liquidator:

The Official Liquidator reported that the affairs of the Transferor Companies do not appear to have been conducted in a manner prejudicial to the interest of its members or public interest. The Regional Director's affidavit included several observations, to which the Petitioners responded affirmatively, agreeing to comply with the provisions of Section 232(3)(i) of the Companies Act, 2013, pay applicable stamp duty, and pass necessary accounting entries as per applicable Accounting Standards. The Petitioners also confirmed that the Scheme enclosed to the Company Application and Company Petition are identical and that all necessary notices to concerned authorities have been served.

4. Shareholding Changes and Disclosure Requirements:

The promoters' stake in the Transferee Company will increase from 64.76% to 99.53% post-merger. This material fact was disclosed in the Valuation Report and the Scheme of Amalgamation. The Petitioners clarified that Adirish Properties Private Limited does not have significant influence over Prateek Agro Exports Private Limited, thus not requiring consolidated financial statements.

5. Pending Proceedings and Service of Notices to Authorities:

The Petitioners complied with the order dated 23rd July 2021, by publishing the notice of hearing and serving the sectoral authorities, including the Registrar of Companies, Central Government, Income Tax Authorities, Official Liquidator, and Competition Commission of India. The affidavit of compliance was filed before the Tribunal. The Tribunal noted that no complaints or representations against the Proposed Scheme of Amalgamation were received.

6. Approval and Binding Nature of the Scheme:

The Scheme of Amalgamation was sanctioned by the Tribunal to be binding with effect from 1st April 2020. All properties, rights, powers, interests, assets, and undertakings of the Transferor Companies will be transferred to the Transferee Company. All liabilities and duties of the Transferor Companies will also be transferred to the Transferee Company. The Transferor Companies will be dissolved without winding up upon filing the certified copy of the order with the Registrar of Companies, West Bengal. The Scheme was deemed fair and reasonable, not violative of any provisions of law, nor contrary to public interest.

The Company Petition CP (CAA) 86/KB/2021 connected with CA (CAA) No. 937/KB/2020 was disposed of without any orders as to costs. Certified copies of the order may be issued upon compliance with all requisite formalities.

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