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TMI Blog2002 (4) TMI 832X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the ICICI Bank Ltd., the transferee company. The petitioner company was incorporated on 5-1-1955 as a public limited company under the Indian Companies Act, 1913. The petitioner company was originally incorporated as the Industrial Credit and Investment Corporation of India Limited and its name was changed to ICICI Ltd. on 11-9-1998. The registered office of the petitioner company is situate at ICICI Towers, Bandra Kurla Complex, Mumbai-400 051. The present authorised share capital of the petitioner company is Rs. 69,50,00,00,000 divided into 1,600,000,000 equity shares of Rs. 10 each, 5,000,000,000 preference shares of Rs. 10 each and 350 preference shares of Rs. 10,000,000 each. The issued capital is Rs. 7,85,34,54,480 divided into 7,85,345,448 equity shares of Rs. 10 each and Rs. 3,50,00,00,000 divided into 3,50,00.001 per cent preference share of Rs. 1,00,00,000 each. The subscribed capital is Rs. 11,34,86,24,831.81 with the calls in arrears on the equity shares aggregating to Rs. 48,29,648.19, ICICI capital was incorporated on 12-9-1994 as a public limited company under the Act. ICICI capital was originally incorporated as SCICI Securities Ltd. and its name was changed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndition that ICICI reduces its shareholding in ICICI Bank in stages, first to not more than 75.0 per cent of its equity shares capital and ultimately to not more than 40.0 per cent of its equity share capital. Thereafter in line with the Reserve Bank directives the petitioner reduced it shareholding in the transferee bank to approximately 46.4 per cent of its equity share capital through sale of equity shares of transferee company in the Indian secondary market. As a result, the transferee bank ceased to be the subsidiary of the petitioner. As on 30-9-2001, the petitioner company had 46.0 per cent of the equity share capital of the transferee bank. The scheme of amalgamation provides for the petitioner to transfer on the appointed date all the shares of the transferee company held by it to an individual trustee or a board of trustees to hold the ICICI Bank shares in trust together with all additions or accretions thereto upon trust exclusively for the benefit of the petitioner company and its successor. The scheme proposes that within a period of 24 months from the effective date, these shares shall be transferred or disposed of and sale proceeds are to be remitted to the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers of ADRs, an information statement dated 20-12-2001 setting out additional information in connection with the scheme. The notice of the meeting was also advertised as directed by the said Order in Business Standard (Mumbai Edition) and Marathi translation thereof in Sakal on 1-1-2002 Shri V. Vaghul, the Chairman of the meeting, has already filed the requisite affidavit under rule 76 of the Companies (Court) Rules, 1959, on 11-1-2002 in respect of the service and appearance of advertisement of the said notice in the said newspapers. 8. It is stated that on 30-1-2002, meeting of the equity shareholders of the petitioner company was duly convened and held. It was attended either personally or by proxy by 1,195 equity shareholders of the petitioner company holding 591,050,382 equity shares of the value of Rs. 5,91,05,03,820. Upon the resolution being placed for voting, 898 equity shareholders of the petitioner company holding 5,90,411,578. Equity Shares representing 77.7 per cent in number of equity shareholders and 99.9 per cent in the value of the equity shares, present and voted in favour of the resolution and 258 equity shareholders holding 6,34,065 equity shares representin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, in substance, the objection that has been raised by these four objectors is similar to the objection raised by the above referred three shareholders, who have raised objections after complying with the provisions of the rules. One of the objections raised is that the approval of the RBI has not been secured as required by the provisions of the Banking Regulation Act. Bare perusal of the provisions of section 44A of the Banking Regulation Act, however, shows that this objection has no substance, in as much as, the provisions of that section come into play only in case the transferee and transferor, both the companies are Banking Companies. In the present case, though the transferee company is a banking company, none of the transferor companies are banking companies. The objection has, thus, no force. 10. Though the objector Mr. Reddy raised objection to the manner in which the meeting of the shareholders convened pursuant to the Court order was conducted by the Chairman, in my opinion, the manner in which the meeting was conducted is not of much significance, considering that there is no objection that the meeting was not validly convened or that the voting is not taken in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uation of the share has not been properly done and fair exchange ratio arrived at by the valuers and which has been proposed in the scheme is not proper. Therefore, it was also suggested by the objector that the RBI has called for a report to assess the fair exchange ratio for the merger and therefore, this Court should call for that report. Accordingly, the notice was sent by this Court to the RBI. The RBI, has accordingly filed an affidavit dated 25-3-2002. It is paragraph 4 of that affidavit, which is relevant and it reads as under: Though the Reserve Bank does not have a function in respect of a merger between ICICI Ltd. and ICICI Bank under section 44A of the Banking Regulation Act, as press reports were appearing on the merger proposal and taking into account the public discussion on the issue of swap ratio and as reference was made by ICICI Bank to Reserve bank for its approval, the Reserve Bank thought it prudent to appoint M/s A. Ferguson Company, Chartered Accountants firm to assess the swap ratio for the merger for the internal reference of the Reserve Bank. M/s. A. Ferguson Co. submitted their report on 9-1-2002. The swap ratio arrived by them was based on three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kill and expertise. There are bound to be differences of opinion as to what the correct value of the shares of any given company is, simply because it is possible to value the shares in a manner different from the one which has been adopted in a given case, it cannot be said that the valuation which has been agreed upon is unfair. What is important in the present case is that all the shareholders of both the companies have unanimously accepted the valuation which has been arrived at by the auditors of the transferor and transferee companies, under these circumstances, the application cannot be rejected on the ground that the valuation of shares is unfair to the shareholders of the transferor-company. In fact, one of the shareholders have complained of any such unfairness. In this connection Mr. Cooper, who appears for the transferor-company, has drawn my attention to the case In re Grierson, Oldham Adams Ltd. [1968] 1 Ch. 17 : [1967] 37 Comp. Cas. 357 (Ch. D). The learned judge in that case has pointed out that the question of valuation is obviously one about which opinions may differ. It is possible in cases like this to criticise figures, offers and balance-sheets and argue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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