2021 (6) TMI 525 - Tri - Companies Law

Approval of scheme of amalgamation - section 230-232 of Companies Act - HELD THAT - Various directions regarding holding and convening of various meetings issued - various directions regarding issuance of various notices also issued - the scheme is approved - application allowed.

Summary

Issues:
1. Scheme of Amalgamation approval for two companies
2. Dispensation of shareholder meeting for Transferor Company
3. Convening meetings for equity shareholders and creditors

Analysis:
The Tribunal addressed an application for the approval of a Scheme of Amalgamation between two companies, Trishan Metals Private Limited and IFB Industries Limited. The Scheme aimed at merging the businesses of the Transferor Company, engaged in manufacturing metals, with the Transferee Company, involved in manufacturing tools and consumer durables. The proposed amalgamation was expected to provide various benefits such as mitigating supply chain risks, enhancing management structure, increasing growth, achieving economies of scale, and improving profitability. The Boards of both companies believed that the merger would lead to operational efficiencies, cost savings, and synergies in business functions. The application was filed under Sections 230 and 232 of the Companies Act, 2013, seeking dispensation of the Transferor Company's shareholder meeting and direction for convening meetings of the Transferee Company's equity shareholders and creditors.

The Tribunal noted that the Transferor Company's shareholder had consented to the Scheme of Amalgamation, thereby dispensing with the need for a shareholder meeting for the Transferor Company. However, meetings were to be convened for the equity shareholders and creditors of the Transferee Company and the Transferor Company. Specific dates and times were set for these meetings, to be conducted via video conferencing or other audio-visual modes. The Tribunal also outlined the procedures for conducting these meetings, including the publication of notices in newspapers, sending notices to shareholders and creditors, and notifying relevant authorities. The Chairperson and Scrutiniser for the meetings were appointed, with instructions to report the meeting results to the Tribunal within a specified timeframe.

Furthermore, the Tribunal directed the applicants to file a second motion petition within two weeks of the Chairperson's report being submitted. The order was contingent upon compliance with all necessary formalities, and a certified copy of the order would be issued upon completion of requirements. The application, labeled as C.A. (C.A.A) No. 18/KB/2021, was disposed of in accordance with the outlined directives.