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of <h1>Approval of Merger Scheme: Subsidiary merged into holding company under Companies Act, 2013</h1> <h3>ATC INFRASTRUCTURE SERVICES PRIVATE LIMITED Versus ATC TELECOM INFRASTRUCTURE PRIVATE LIMITED</h3> The court approved the Scheme of Merger by Absorption of a wholly owned subsidiary into the holding company under Sections 230 to 232 of the Companies ... Scheme of Merger by Absorption - Sections 230 to 232 of the Companies Act, 2013 - HELD THAT:- Various directions regarding holding, convening and dispensing with various meetings issued - directions regarding issuance of various notices issued - the scheme is approved - application allowed. Issues:1. Scheme of Merger by Absorption of wholly owned subsidiary into the holding company under Sections 230 to 232 of the Companies Act, 2013.2. Approval of the Scheme by the Board of Directors.3. Consent of equity shareholders and dispensation of shareholder meeting.4. Details regarding the merger benefits, operational efficiencies, and shareholders' value enhancement.5. No reconstruction or arrangement with shareholders or creditors of the Transferee Company.6. Requirement of convening meetings for Secured Creditors, Unsecured Creditors, and regulatory authorities.7. Service of notices to regulatory authorities and Official Liquidator.Analysis:1. The judgment pertains to a Scheme of Merger by Absorption of a wholly owned subsidiary, ATC Infrastructure Services Private Limited, into the holding company, ATC Telecom Infrastructure Private Limited, as per Sections 230 to 232 of the Companies Act, 2013. The Counsel for the Applicant Companies emphasized the benefits of the merger, including consolidation of business, growth impetus, synergies, operational efficiencies, and optimal resource utilization.2. The Board of Directors of the Applicant Companies approved the Scheme in meetings held on 29th January 2019, with the Appointed Date set as 1st June 2018. The merger was deemed beneficial for the Transferor Company, Transferee Company, shareholders, creditors, employees, and stakeholders, aiming at enhancing shareholders' value through the consolidation of both entities.3. Consent affidavits from all equity shareholders of the First Applicant Company were obtained, leading to the dispensation of the shareholder meeting. The Second Applicant Company, being the holding company, clarified that no reconstruction or arrangement with its shareholders or creditors was involved in the merger, and no dilution in shareholding would occur.4. The judgment highlighted the necessity of issuing notices to Unsecured Creditors with a value of Rs. 1,00,000 or more, along with serving notices to regulatory authorities, Income Tax Authorities, Central Government offices, Registrar of Companies, and the Department of Telecommunication. The Tribunal directed the Applicant Companies to serve notices and schemes to the relevant authorities for representations within a specified timeframe.5. Additionally, the judgment mandated the First Applicant Company to serve notices to the Official Liquidator for scrutiny of the company's accounts by appointed Chartered Accountants. The Official Liquidator was given a timeframe to submit representations, if any, regarding the merger proposal. The Applicant Companies were instructed to file an Affidavit of service in the Registry to prove the dispatch of notices to regulatory authorities and publication in newspapers.
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