Court approves merger of companies in Scheme of Amalgamation The Court sanctioned the Scheme of Amalgamation, approving the merger of the transferor-company into the transferee-company as proposed. All necessary ...
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Court approves merger of companies in Scheme of Amalgamation
The Court sanctioned the Scheme of Amalgamation, approving the merger of the transferor-company into the transferee-company as proposed. All necessary meetings were held, with unanimous approval from shareholders and creditors. Compliance with legal requirements was confirmed, and objections raised by the Regional Director were addressed satisfactorily. The Scheme was made binding on all parties involved, and the Registrar was directed to formalize the order, concluding the matter.
Issues: Petition under sections 391 to 394 of the Companies Act seeking sanction of the Scheme of Amalgamation by the Court.
Analysis: The petition was presented seeking approval for the merger of the transferor-company into the transferee-company as per the proposed Scheme of Amalgamation. The Board of Directors of the transferor-company had already approved the Scheme in a meeting. Subsequently, Company Application No. 6/2009 was filed under sections 391 and 393 of the Companies Act to convene meetings of shareholders and creditors. The Court directed the meetings to be held, where all parties unanimously approved the Scheme of Amalgamation. Importantly, no proceedings under sections 235 to 251 of the Companies Act were pending against the petitioner-company, indicating compliance with legal requirements.
Analysis: Notices were served to the Official Liquidator and Regional Director, Ministry of Corporate Affairs, with the former raising no objection to the Scheme. However, the Regional Director raised an objection regarding compliance with Accounting Standard 14 for Amalgamations. The petitioner-company assured compliance with the Accounting Treatment as prescribed under Accounting Standard 14 in its rejoinder. Considering this assurance, the Court sanctioned the Scheme of Amalgamation, making it binding on the shareholders, creditors, and the petitioner-company. The Registrar was directed to formalize the order in Form No. 42 of the Companies (Court) Rules, 1959, thereby concluding the matter and disposing of the petition.
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