2021 (1) TMI 721 - Tri - Law of Competition

Scheme of merger and Amalgamation - seeking the dispensation of meeting of all the shareholder and creditors of all the petitioner companies as all the shareholders and creditors of the applicant/transferor companies as well as applicant/transfree company for the proposed scheme of merger and amalgamation - section 230-232 of the Companies Act 2013 - HELD THAT - On perusal of the record it is found that there are no Secured Creditors in the Transferor Company No. 1 and 2 hence no need of convening a meeting of the secured creditors of Transferor Company No. 1 and 2. The meetings of share holders of the applicant companies no. 1 2 and 3 Companies shall be held on 10.10.2020 at 1 00 P.M. 2 00 PM and 3 00 A.M. respectively at registered office of transfree company i.e. at Plot no. 5520 Road No. 55 GIDC Sachin Surat or through video conferencing for the purpose of considering and if thought fit approving with or without modification(s) the Scheme of Arrangement - the meetings of the unsecured creditors of applicant company no. 2 and applicant/transfree company no. 3 shall be held on 10.10.2020 at 4 00 PM and 5 00 PM respectively at registered office of transfree company i.e. at Plot no. 5520 Road No. 55 GIDC Sachin Surat or through video conferencing for the purpose of considering and if thought fit approving with or without modification(s) the Scheme of Arrangement. Various directions regarding the meetings issued - application allowed.

Summary

Issues:
Dispensation of meeting of shareholders and creditors for proposed scheme of merger and amalgamation under sections 230-232 of the Companies Act, 2013.

Analysis:
The application filed jointly by the companies sought the dispensation of meetings of shareholders and creditors for the proposed scheme of merger and amalgamation. The companies provided reasons for the amalgamation, including common shareholding, leveraging resources, and strengthening financial positions. The companies confirmed no pending investigations or proceedings under Sections 210 to 226 of the Companies Act, 2013. They also clarified that notice to RBI and CCI was not required due to their specific circumstances.

The companies submitted details of shareholders, secured creditors, and unsecured creditors, along with consent affidavits. The accounting treatment proposed in the scheme was in line with accounting standards. The counsel contended that meetings of shareholders and certain creditors could be dispensed with due to obtained consents. However, it was agreed to convene meetings of all shareholders and creditors of the companies.

The Tribunal found no need to convene meetings of secured creditors for certain companies. Meetings were scheduled for shareholders and creditors, with specific dates and quorum requirements outlined. Advertisements and notices were to be published and sent out as per regulatory requirements. The Chairperson and Scrutinizer for the meetings were appointed, with directions for compliance and reporting to the Tribunal.

The Chairperson was granted powers to conduct the meetings, decide procedural questions, and report the meeting results to the Tribunal. Compliance with Companies (CAA) Rules was emphasized, including sending notices to relevant authorities. The order allowed the application and provided detailed instructions for further actions in compliance with the Companies Act, 2013 and related rules.