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2020 (1) TMI 109 - Tri - Companies LawMaintainability of application - Directions for dispensing with/ convening the respective meetings of shareholders, secured creditors and unsecured creditors of the Applicant Companies, in connection with the proposed Scheme of Amalgamation contemplated between the Applicant Companies - HELD THAT - The Company does not have any Preference Shareholders, thus there is no requirement of convening any meeting of Preference Shareholders. In respect of Secured Creditors, it is represented that all the Secured Creditors of the Transferee Company representing 100% in value of the Transferee Company have given their consents by way of affidavits to the scheme and thus, the Transferee Company seeks dispensation of holding the meeting of the secured creditors. With respect to equity shareholders and Unsecured Creditors, the Transferee Company seeks necessary directions for convening and holding the meetings of Equity shareholders and Unsecured Creditors for the purpose of obtaining their approval to the Scheme, since no consents are obtained from Equity shareholders and Unsecured Creditors - A copy of Memorandum and Article of Association of all four Transferor companies and Transferee Company has been placed on record. A copy of the scheme of Amalgamation as stated supra has been placed for record. The Appointed date of the scheme is 1st April, 2019. The certificates of statutory auditors of all four Transferor Companies and Transferee Company certifying the Accounting Treatment as required under Section 133 of the Companies Act are placed for record. The Board of Directors of the Transferor Company Nos. 1, 3 and 4, and Transferee Company in its Board Meeting held on 16th May, 2019 and the Transferor Company No. 2 in its Board Meeting held on 17th May, 2019 have approved the proposed scheme of amalgamation and copies of the resolution(s) are placed on record - All the Transferor Companies and Transferee Company have submitted that no investigation proceedings have been instituted or are pending under Sections 235 to 251 of the Companies Act, 1956 or under Sections 210 to 226 of the Companies Act, 2013 against any of the Company. Further, the Transferor Companies and Transferee Company have also submitted that the scheme is not otherwise opposed to public policy or interest of the members of the respective Applicant Companies. The directions are issued with respect to calling, convening and holding of the meeting of the shareholders, secured creditors and unsecured creditors or dispensing with the same as well as issue of notices including publications - All the directions are to be complied with strictly in accordance with the applicable rules including forms and formats contained in the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 as well as the provisions of the Companies Act, 2013 by all the Applicants. Application allowed.
Issues Involved:
1. Jurisdiction of the Tribunal 2. Benefits of the Scheme of Amalgamation 3. Corporate Debt Restructuring 4. Authorization and Board Resolutions 5. Details of Transferor and Transferee Companies 6. Shareholders, Secured Creditors, and Unsecured Creditors' Consent 7. Investigation Proceedings 8. Directions for Meetings and Notices Issue-wise Detailed Analysis: 1. Jurisdiction of the Tribunal: The registered offices of Transferor Companies No. 1 to 3 and the Transferee Company are situated in New Delhi, within the territorial jurisdiction of this Tribunal. The application for Transferor Company No. 4, initially filed before the Mumbai Bench, was transferred to this Bench by the Principal Bench at New Delhi. 2. Benefits of the Scheme of Amalgamation: The merger aims to achieve business and administrative synergies, consolidate and simplify the group structure, save costs, improve organizational capability, avoid unnecessary duplication of costs, and maximize shareholder value. The appointed date for the scheme is April 1, 2019. 3. Corporate Debt Restructuring: The scheme does not contemplate any corporate debt restructuring exercise under section 230(2) of the Companies Act, 2013. 4. Authorization and Board Resolutions: Affidavits supporting the joint application were filed by authorized signatories of the Transferor and Transferee Companies, with corresponding Board Resolutions dated May 16, 2019, and May 17, 2019, placed on record. 5. Details of Transferor and Transferee Companies: - Transferor Company No. 1: Incorporated on December 23, 2010, with an authorized share capital of ?58,50,00,000 and issued, subscribed, and paid-up share capital of ?58,50,00,000. - Transferor Company No. 2: Incorporated on November 11, 2011, with an authorized share capital of ?2,25,00,000 and issued, subscribed, and paid-up share capital of ?1,98,76,000. - Transferor Company No. 3: Incorporated on November 13, 1996, with an authorized share capital of ?25,00,000 and issued, subscribed, and paid-up share capital of ?21,02,000. - Transferor Company No. 4: Incorporated on January 18, 1988, with an authorized share capital of ?2,95,06,000 and issued, subscribed, and paid-up share capital of ?84,99,600. - Transferee Company: Incorporated on September 16, 1992, with an authorized share capital of ?63,50,00,000 and issued, subscribed, and paid-up share capital of ?52,44,33,930. 6. Shareholders, Secured Creditors, and Unsecured Creditors' Consent: - Transferor Company No. 1: 7 Equity Shareholders (100% consent), 2 Secured Creditors (100% consent), 386 Unsecured Creditors (meeting required). - Transferor Company No. 2: 8 Equity Shareholders (100% consent), no Secured Creditors, 61 Unsecured Creditors (meeting required). - Transferor Company No. 3: 7 Equity Shareholders (100% consent), no Secured Creditors, 68 Unsecured Creditors (meeting required). - Transferor Company No. 4: 2 Equity Shareholders (100% consent), 4 Secured Creditors (100% consent), 672 Unsecured Creditors (meeting required). - Transferee Company: 53,101 Equity Shareholders (meeting required), 6 Secured Creditors (100% consent), 1,648 Unsecured Creditors (meeting required). 7. Investigation Proceedings: No investigation proceedings have been instituted or are pending against any of the companies under relevant sections of the Companies Act, 1956 or 2013. The scheme is not opposed to public policy or the interest of the members of the respective Applicant Companies. 8. Directions for Meetings and Notices: The Tribunal issued directions for convening and holding meetings of shareholders, secured creditors, and unsecured creditors, or dispensing with the same, as follows: - Transferor Company No. 1: Meeting of unsecured creditors on December 11, 2019, at 11:00 AM. - Transferor Company No. 2: Meeting of unsecured creditors on December 11, 2019, at 12:00 Noon. - Transferor Company No. 3: Meeting of unsecured creditors on December 11, 2019, at 1:00 PM. - Transferor Company No. 4: Meeting of unsecured creditors on December 16, 2019, at 11:30 AM. - Transferee Company: Meeting of equity shareholders on December 9, 2019, at 9:30 AM, and meeting of unsecured creditors on December 11, 2019, at 2:00 PM. The Tribunal appointed chairpersons, alternative chairpersons, and scrutinizers for the meetings and set their fees. Notices of meetings are to be sent 30 days in advance and published in specified newspapers. Voting on the proposed scheme is allowed in person or by proxy. Notices must also be sent to relevant regulatory authorities. The application was allowed and disposed of accordingly.
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