2022 (2) TMI 99 - Tri - Companies Law

Sanction of proposed Scheme of Arrangement - Section 232 read with 230 of the Companies Act, 2013 and Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, and other applicable provisions - HELD THAT - Since shareholders of all the companies have given their consent for dispensation of convening the meeting, hence the convening the meeting of shareholders is dispensed with and by exercising powers under Section 230(9) of the Companies Act, 2013, the requirement of convening the meeting of Secured Creditors and Unsecured Creditors of the five Transferor Companies and of the Transferee Company also dispensed with. The scheme is approved - application allowed.

Issues involved:
Application for Amalgamation of Companies and dispensation of shareholder and creditor meetings under Sections 230 and 232 of the Companies Act, 2013.

Detailed Analysis:

1. Application for Amalgamation:
The judgment pertains to an application for the amalgamation of multiple companies, including Transferor Companies 1 to 5 and a Transferee Company. The application seeks to dispense with the requirement for convening meetings of Equity Shareholders, Secured Creditors, and Unsecured Creditors of the involved companies, citing Sections 230 and 232 of the Companies Act, 2013, and relevant rules.

2. Rationale for Amalgamation:
The rationale behind the proposed amalgamation includes consolidating operations, pooling various resources, and reducing administrative duplication and costs within the group structure. The appointed date for the scheme is set as 1st April 2020.

3. Details of Transferor Companies:
Detailed information is provided for each Transferor Company, including incorporation dates, business activities, share capital structure, shareholder details, board approvals, and consent for the scheme. The companies have no Secured Creditors and limited Unsecured Creditors as of specific dates.

4. Details of Transferee Company:
Similar detailed information is provided for the Transferee Company, including incorporation details, business activities, share capital structure, shareholder details, board approvals, and creditor information. The Transferee Company also has no Secured Creditors but has two Unsecured Creditors with outstanding balances.

5. Financial Documentation and Compliance:
The judgment mentions the submission of audited annual accounts, provisional unaudited accounts, and certification by auditors regarding the accounting treatment proposed in the scheme. Valuation reports and share exchange ratios are provided for the amalgamation process.

6. Employee Transition and Share Capital Merger:
Provisions are made for the transition of employees from Transferor Companies to the Transferee Company, ensuring terms not less favorable. The authorized share capital of the Transferor Companies will merge with that of the Transferee Company, leading to the issuance of new equity shares in the Transferee Company.

7. Approval and Disposition:
The judgment notes that all shareholders have consented to dispensing with the shareholder meetings, leading to the dispensation of convening meetings of Secured and Unsecured Creditors. It is mentioned that there are no pending investigations or proceedings against the involved companies, and the scheme is deemed not prejudicial to the interests of shareholders and creditors.

8. Final Disposition:
The judgment concludes by disposing of the petition in terms of the directions provided, indicating the approval of the amalgamation application and the dispensation of required meetings based on shareholder consent and legal provisions.

This detailed analysis covers the key aspects of the judgment, including the application for amalgamation, rationale, company details, financial compliance, employee transition, approval process, and final disposition of the petition.

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