2021 (3) TMI 388 - Tri - Companies Law

Sanction of Scheme of Amalgamation - section 230-232 of Companies Act - HELD THAT - Various directions regarding holding and convening of various meetings issued - directions regarding issuance of notices also issued. Application disposed off.

Summary

Issues:
Application for sanction of Scheme of Amalgamation between two companies.

Analysis:
The application sought approval for the Scheme of Amalgamation between a Transferor Company and a Transferee Company. The reasons justifying the amalgamation included combining business activities, restructuring for better utilization of resources, achieving economies of scale, and enhancing profitability. The Board of Directors of both companies unanimously approved the draft scheme, believing it would benefit shareholders, creditors, employees, and the public. The application confirmed that the assets of the companies were sufficient to meet liabilities without adversely affecting creditors' rights. The scheme did not involve capital reduction, corporate debt restructuring, or compromise with creditors.

The application detailed that no debentures were issued by either company, and provisions were made for timely payment of liabilities. It also stated the absence of pending proceedings under relevant sections of the Companies Act. Reports on share exchange ratios, consents from equity shareholders, and creditors were submitted and certified by auditors. The statutory auditors confirmed that the accounting treatment in the scheme complied with relevant standards.

Upon hearing submissions, the Tribunal passed several orders. It dispensed with the need for separate meetings of equity shareholders and secured creditors due to consents received. Notices were to be served to various authorities for representations, with specific timelines and modes of service outlined. The applicants were directed to file affidavits regarding notice service and compliance with conditions. The companies were required to affirm no pending investigations or proceedings under the Companies Act and given liberty to file a joint application within the specified period. Non-compliance or false affidavits could lead to fraud charges under the Companies Act. The application was disposed of with no costs awarded, and the Registry was instructed to provide copies of the order to all parties promptly.