Scheme of amalgamation: Court-directed procedures for convening stakeholder meetings, proxy voting, chairman appointment and valuation. Application sought directions for convening, holding and conducting meetings to consider a scheme of amalgamation between two companies. The court ...
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Scheme of amalgamation: Court-directed procedures for convening stakeholder meetings, proxy voting, chairman appointment and valuation.
Application sought directions for convening, holding and conducting meetings to consider a scheme of amalgamation between two companies. The court directed separate meetings of equity shareholders, unsecured creditors and secured creditors, required advance notices, advertisements and proxy forms, and appointed a Chairman with specified remuneration and powers to issue notices, determine disputed valuations using company books and report results to court verified by affidavit within seven days. Voting by proxy was permitted subject to filing, and the application was disposed of in accordance with these procedural directions affecting stakeholder approval and valuation processes.
Issues: Application under sections 391 and 394 of the Companies Act, 1956 for direction on convening, holding, and conducting meetings for scheme of amalgamation between two companies.
Analysis: The applicant company filed an application under sections 391 and 394 of the Companies Act, 1956 seeking directions from the Court regarding the method of convening, holding, and conducting meetings for the purpose of considering and approving the scheme of amalgamation between Aksh Broadband Limited (transferor Company) and Aksh Optifibre Limited (Transferee Company). The applicant company was originally incorporated as Aksh India Private Limited and later converted into a Public Limited Company. The authorized, issued, subscribed, and paid-up capital of the applicant company was detailed in the application. The main objects of the applicant company were outlined in the object clause of its Memorandum of Association, along with the submission of the latest audited annual accounts as Annexure C to the application.
The Board of Directors of the applicant company approved the scheme of amalgamation in a resolution marked as Annexure D with the application. After hearing the counsel for the applicant and perusing the application, the Court ordered separate meetings of equity shareholders, unsecured creditors, and secured creditors to be convened and held as per the specified schedule. The Court directed that advertisements and notices for the meetings, along with the scheme of amalgamation and forms of proxy, be sent to the respective stakeholders in advance. The advocates for the applicant company were instructed to file necessary forms in Court, which would be settled by the Registrar of the Court.
The Court appointed a Chairman for the meetings of stakeholders and specified the remuneration to be paid by the applicant company for the Chairman's services. The Chairman was tasked with issuing advertisements and sending out meeting notices. The Court allowed voting by proxy, subject to the prescribed form being filed with the applicant company within the specified timeframe. The valuation of stakeholders was to be in accordance with the applicant company's books, with the Chairman empowered to determine the value in case of disputes. The Chairman was required to report the meeting results to the Court within seven days of conclusion, verified by an affidavit. The application was disposed of in accordance with these directions.
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