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TMI Blog2003 (11) TMI 337X X X X Extracts X X X X X X X X Extracts X X X X ..... he authorised capital of the company is Rs. 25,00,000 divided into 2,50,000 equity shares of Rs. 10 each. The issued, subscribed and paid-up share capital of the company is Rs. 24,50,000 divided into 2,45,000 equity shares of Rs. 10 each. The main object of incorporating the said company as set out in the Memorandum of Association annexed to the petition, is to carry on business of manufacturers, processors, producers, buyers, sellers, traders, importers of all kinds of steel. 3. The petitioner in C.P. No. 100 of 2003, namely the transferee company, was incorporated on 22-2-1986 with its registered office at Mukhtiargunj, Hyderabad. The authorised capital of the company is Rs. 1,00,00,000 divided into 10,00,000 equity shares of Rs. 10 e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany. In order to have synergy of operations and also to reduce the overhead costs, it was thought fit to amalgamate the transferor company with the transferee company. The proposed amalgamation is beneficial not only to the shareholders but also the employees of both the companies. 6. The salient features of the scheme are that on and from the effective date, all the properties - assets and liabilities of the transferor company would stand vested with the transferee company. The scheme further postulates that all the employees of the transferor company shall be the employees of the transferee company without any interruption in service and on the basis of continuity of service. Clause 8( a ) of the Scheme further provides that upon th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xchange ratio seems to be unfair especially when the transferor company has been incurring huge loss and is not doing any steel business and the only income which has been derived by it is the lease income. Hence, it has been suggested for considering the revaluation of the assets of the transferor company by appointing an independent valuer. 8. The Official Liquidator attached to this Court filed a report stating, inter alia , that the affairs of the companies have not been conducted in a manner prejudicial to the interests of the members and to the public interest. 9. As can be seen from the Memorandum and Articles of Association of all the companies annexed to the petitions, except the shareholders of the transferee and transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of amalgamation, the court has to see whether the scheme as a whole is a reasonable and fair one and if the court finds that the scheme as a whole is fair and reasonable, then it is not for the court to substitute its judgment for the collective wisdom of the shareholders of the two companies. If the shareholders of the two companies in their collective wisdom have accepted the exchange ratio which has been worked out by a recognized firm of chartered accountants who are experts in the field of valuation and if no mistake could be pointed out in the said valuation, then, as rightly contended by the learned counsel for the petitioner, it is not for this court to interfere with such a decision taken by the shareholders. I am reinforced in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also keeping in view the fact that both the transferor and transferee companies are very closely held companies and there is no public interest involved and that there are also no secured loans in both the transferor and transferee companies and there are only unsecured loans which are advanced by the Directors and shareholders who have expressed no objection for the sanction of the scheme of amalgamation, I am of the considered view that the scheme shall have to be sanctioned. 13. The company petitions are ordered accordingly. The assets and liabilities of the transferor company shall stand transferred and get merged with the assets and liabilities of the transferee company without going through the process of winding up. Certified co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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