Shareholder Meetings Ordered for Multimetals Scheme Approval

The Court ordered the convening and holding of meetings of preference and equity shareholders to consider a proposed scheme of arrangement by Multimetals Limited under section 391 of the Companies Act, 1956. The meetings were to be conducted at specified dates, with advertisements published in newspapers, notices sent to shareholders, and necessary forms filed with the Registrar. A Chairman was appointed to oversee the meetings, determine shareholder values, handle disputes, and report the meeting outcomes to the Court within seven days, thus concluding the application.

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Issues:
Convening, holding, and conducting meetings of preference and equity shareholders to consider a scheme of arrangement proposed by the company under section 391 of the Companies Act, 1956.

Analysis:
The applicant, Multimetals Limited, filed an application under section 391 of the Companies Act, 1956 seeking directions on convening meetings of preference and equity shareholders to consider a proposed scheme of arrangement. The applicant company was incorporated on 2-8-1962 and had its authorized, issued, subscribed, and paid-up capital detailed in the application. The company's main objects were outlined in the Memorandum of Association, and its latest audited annual accounts were submitted. The company had faced financial challenges in the past, being declared a Sick Industrial Company, but had successfully implemented a revival scheme. To further strengthen its financial position, the company proposed converting preference shares into equity shares, which was approved by the Board of Directors. No pending proceedings under sections 235 to 251 of the Companies Act existed against the company.

The Court, after hearing the applicant's counsel and reviewing the application, ordered the meetings of preference and equity shareholders to be convened and held on specific dates at the company's registered office. The Court directed that advertisements be published at least 21 days before the meetings in specified newspapers, providing details of the scheme of arrangement and proxy forms. Notices, along with necessary documents, were to be sent to shareholders via prepaid post. The applicant's advocates were required to file necessary forms in Court within a specified time for settlement by the Registrar.

The Court appointed a Chairman for the meetings, specifying the remuneration to be paid by the applicant company. The Chairman was tasked with issuing advertisements and sending out meeting notices. The quorum for the meetings was to be as per the provisions of the Companies Act, 1956, with provisions for proxy voting. The value of each shareholder would be determined according to the company's books, with the Chairman having authority in case of disputes. The Chairman was required to report the meeting results to the Court within seven days, verified by affidavit, concluding the disposal of the application.

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