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Issues: Whether the scheme of amalgamation deserved sanction in light of compliance with the statutory requirements, the fairness of disclosure and voting, the valuation of the transferor company's shares, the alleged detriment to the transferee company, the dividend clause, and the objections based on employee interests.
Analysis: The scheme was placed before the court after the requisite meetings were convened and the explanatory statement accompanied the notice. The majority of shareholders, creditors and other constituent classes approved the proposal overwhelmingly. The objections relating to non-disclosure, proxy collection, and alleged fraud were not borne out by the record. The valuation of the transferor company's shares was upheld as a reasonable one in the circumstances, having regard to the market quotation, the asset-liability position, and the possibility of revival of the undertaking. The court held that a scheme of amalgamation is not to be rejected merely because it is designed to revive a loss-making unit, so long as the scheme is broadly beneficial to the company as a whole and not shown to be unfair, fraudulent or oppressive. The dividend provision from the effective date was not treated as retrospective membership in a prohibited sense, because the scheme, once sanctioned, would operate from the effective date. The apprehensions regarding employee prejudice were also found to be unfounded.
Conclusion: The objections were rejected and the scheme of amalgamation was sanctioned.
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