2020 (9) TMI 380 - Tri - Companies Law

Sanction of Amalgamation Scheme - Sections 230 to 232 of Companies Act - HELD THAT - The Official Liquidator has filed his report on 13th August, 2020 in the Company Scheme Petition No. 944 of 2020, inter alia, stating therein that the affairs of the Transferor Companies have been conducted in a proper manner not prejudicial to the interest of the Shareholders of the Transferor Companies and that the Transferor Companies may be ordered to be dissolved by this Tribunal - From the material on record, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy. Petition allowed subject to conditions imposed.

Summary

Issues:
Sanction of Amalgamation Scheme under Companies Act, 2013

Analysis:
The Tribunal was approached for the sanction of an Amalgamation Scheme under Sections 230 to 232 of the Companies Act, 2013. The Scheme involved the merger of two Transferor Companies with a Transferee Company. The Petitioner Companies had approved the Scheme through Board Resolutions and had complied with all requirements as per the Tribunal's directions. The management believed that the merger would result in operational synergies and various benefits, including consolidation of business, cost savings, improved control systems, financial strength, and enhanced stakeholder value.

The Regional Director's report stated that, except for certain observations, the Scheme was not prejudicial to shareholders and the public. The report highlighted compliance requirements related to accounting standards, appointed date, fee set-off, approval by stakeholders, Real Estate Regulation Act compliance, and notifications to concerned authorities. The Petitioner Companies addressed each observation, confirming compliance with accounting standards, appointed date effectiveness, fee set-off, stakeholder approval, non-applicability of Real Estate regulations, and consistency of the Scheme documents.

The Official Liquidator's report confirmed proper conduct of the Transferor Companies' affairs, not prejudicial to shareholders, recommending their dissolution. The Tribunal found the Scheme fair, reasonable, compliant with the law, and not against public policy. As all statutory requirements were met, the Company Scheme Petition was allowed, sanctioning the Scheme with specific directives for dissolution of Transferor Companies, filing of orders with authorities, compliance with undertakings, and publication requirements.

The Tribunal's order sanctioned the Scheme with an Appointed Date, directed dissolution of Transferor Companies without winding up, specified filing and publication obligations, and mandated compliance with undertakings and statutory steps. Interested parties were given liberty to seek necessary directions from the Tribunal. The judgment concluded by outlining detailed instructions for the implementation and communication of the sanctioned Scheme, ensuring legal compliance and stakeholder awareness.