2020 (5) TMI 688 - Tri - Insolvency and Bankruptcy

Approval of Amalgamation & Merger Scheme under Companies Act 2013

IN Re: Reliance Holding USA Inc, Reliance Energy Generation and Distribution Limited, Reliance Industries Limited

The court approved the Composite Scheme of Amalgamation and Plan of Merger between multiple companies under sections 230 to 232 of the Companies Act, ... Composite Scheme of Amalgamation and Plan of Merger (Scheme) - sections 230 to 232 read with section 234 and other applicable provisions of the Companies Act, 2013 - HELD THAT:- Various directions regarding holding, convening and dispensation of various meetings issued - directions regarding issuance of various notices issued. The scheme is approved - application allowed. Issues:1. Composite Scheme of Amalgamation and Plan of Merger between multiple companies.2. Requirement of shareholder meetings for approval of the Scheme.3. Exemption from convening meetings for certain categories of shareholders.4. Directions for notice issuance to creditors and regulatory authorities.5. Appointment of Chartered Accountants for scrutiny of Transferor Companies' accounts.6. Compliance with serving notices to sectoral regulators and publishing in newspapers.7. Filing of compliance report with the Registry.Analysis:1. The judgment deals with a Composite Scheme of Amalgamation and Plan of Merger involving multiple companies, including Transferor and Transferee Companies, under sections 230 to 232 of the Companies Act, 2013.2. The judgment discusses the requirement of shareholder meetings for approval of the Scheme, highlighting that consent affidavits from equity and preference shareholders have been obtained, exempting the need for physical meetings.3. It further exempts convening meetings for Equity Shareholders of the ultimate Transferee Company, based on precedents and the positive financial position ensuring no diminution of liabilities for Secured Creditors.4. The judgment provides detailed directions for issuing notices to Secured and Unsecured Creditors, Debenture Holders, regulatory authorities, and Official Liquidator, ensuring compliance with legal procedures and scrutiny of accounts.5. Notably, Chartered Accountants are appointed to assist the Official Liquidator in examining Transferor Companies' accounts, with a fixed fee and a specified timeline for report submission.6. The judgment emphasizes serving notices to sectoral regulators, publishing in newspapers, and hosting on company websites for wider dissemination and regulatory compliance.7. Finally, the judgment mandates filing a compliance report with the Registry, considering the prevailing lockdown situation, as an alternative to the customary affidavit of service, ensuring adherence to the directives issued in the Order.