2017 (7) TMI 780 - Tri - Companies Law

Tribunal Orders Meetings for Scheme Approval

The Tribunal dispensed with the meetings for equity shareholders, secured creditors, and unsecured creditors of the Applicant Transferor Companies as all ... Scheme of Amalgamation - amalgamation of Wholly Owned Subsidiary Companies with a Holding Company - Held that:- In the Companies Act, 2013, in fact for amalgamation of Wholly Owned Subsidiary Companies with a Holding Company, the Companies need not approach this Tribunal and they can approach the Regional Director after holding Meetings of shareholders of the respective Companies, as provided under Section 233 of the Companies Act, 2013. But, the Applicant Companies opted to file the Application before this Tribunal obviously invoking sub-section (14) of Section 233. Invoking sub-section (14) of Section 233 means, that the Applicant Companies are submitting to the procedure as laid down in Sections 230 to 232 of the Act. The proposed Scheme, in view of the said provisions, needs approval of the shareholders and creditors of the Applicant Transferee Company and, therefore, this Tribunal is not inclined to dispense with the procedure laid down under Section 230 to 232 of the Companies Act, in case of Transferee Company, Applicant No. 4. The Meeting of Equity Shareholders of Applicant Companies No. 1 to 3 (Transferor Companies), Unsecured Creditors of the Applicant Companies No. 1 to 3 (Transferor Companies), Equity Shareholders of the Applicant No. 4 Transferee Company, Secured Creditors of the Applicant No. 4 Transferee Company, Unsecured Creditors of the Applicant No. 4 Transferee Company is dispensed with. Applicant Transferee Company is required to provide facility of Postal Ballot and E-Voting by the shareholders. Accordingly, voting by equity shareholders of the Applicant Transferee Company to the Scheme shall be carried out through (i) Postal Ballot; (ii) e-Voting; and (iii) electronic voting system or ballot or polling paper at the venue of the meeting to be held on 09.06.2017. All the other rules and procedures related to notice, appointments and conduct of meetings, Voting by Proxy/Authorised Representative need to be adhered to. Issues Involved:1. Dispensation of meetings for equity shareholders, secured creditors, and unsecured creditors of the Applicant Transferor Companies.2. Requirement of meetings for equity shareholders, secured creditors, and unsecured creditors of the Applicant Transferee Company.3. Compliance with SEBI regulations and circulars.4. Approval and procedural requirements under Sections 230 to 232 of the Companies Act, 2013.5. Directions for convening and conducting meetings for the proposed Scheme of Arrangement.Issue-wise Detailed Analysis:1. Dispensation of Meetings for Equity Shareholders, Secured Creditors, and Unsecured Creditors of the Applicant Transferor Companies:The Tribunal noted that all equity shareholders of the Applicant Transferor Companies No. 1 to 3 had given their consent letters for the proposed Scheme and waived their rights to call for meetings. The Chartered Accountant's certificate confirmed the consents, and hence, the meetings of equity shareholders for these companies were dispensed with. Additionally, there were no secured creditors for the Applicant Transferor Companies, as confirmed by the Chartered Accountant's certificate. Therefore, there was no need to hold meetings of secured creditors. Furthermore, all unsecured creditors of the Applicant Transferor Companies No. 1 to 3 had also given their consent letters and waived their right to attend the meetings. Consequently, the meetings of unsecured creditors were also dispensed with.2. Requirement of Meetings for Equity Shareholders, Secured Creditors, and Unsecured Creditors of the Applicant Transferee Company:The Applicant Transferee Company, being a listed company, had its equity shares listed on the Bombay Stock Exchange and National Stock Exchange. The proposed Scheme was submitted to SEBI for disclosure purposes, as per the SEBI Circular dated 15th February 2017. The Tribunal observed that no consent letters from the secured or unsecured creditors of the Applicant Transferee Company were filed, nor were the consent letters from the shareholders of the Transferee Company. Therefore, the Tribunal mandated that meetings of equity shareholders, secured creditors, and unsecured creditors of the Applicant Transferee Company be convened to consider and approve the proposed Scheme of Arrangement.3. Compliance with SEBI Regulations and Circulars:The Tribunal referenced the SEBI Circular dated 15th February 2017, which stated that for schemes involving the amalgamation of wholly-owned subsidiaries with the holding company, prior approval from SEBI or stock exchanges was not necessary, and the scheme only needed to be submitted for disclosure purposes. The Tribunal noted that the Applicant Transferee Company had complied with this requirement.4. Approval and Procedural Requirements under Sections 230 to 232 of the Companies Act, 2013:The Tribunal highlighted that the Applicant Companies opted to file the application before the Tribunal, invoking sub-section (14) of Section 233 of the Companies Act, 2013. This meant that the Applicant Companies were submitting to the procedure laid down in Sections 230 to 232 of the Act. Consequently, the proposed Scheme required approval from the shareholders and creditors of the Applicant Transferee Company, and the Tribunal was not inclined to dispense with this procedure.5. Directions for Convening and Conducting Meetings for the Proposed Scheme of Arrangement:The Tribunal issued comprehensive directions for convening and conducting the required meetings:- The meeting of equity shareholders of the Applicant Transferee Company was scheduled for 9th June 2017 at 9:45 AM.- The meeting of secured creditors of the Applicant Transferee Company was scheduled for 9th June 2017 at 3:00 PM.- The meeting of unsecured creditors of the Applicant Transferee Company was scheduled for 9th June 2017 at 11:00 AM.- The Tribunal mandated that voting by equity shareholders be carried out through postal ballot, e-voting, and electronic voting at the meeting venue.- Notices for the meetings were to be sent to the concerned parties at least one month before the meeting date, and advertisements about the meetings were to be published in specified newspapers.- The Tribunal appointed specific individuals as Chairpersons for the meetings and a Practising Company Secretary as the Scrutinizer.- Detailed instructions were provided regarding the issuance of notices, quorum requirements, proxy voting, and reporting the meeting results to the Tribunal.Final Order:The Tribunal disposed of the Company Application, providing detailed orders and directions for the conduct of the meetings and compliance with statutory requirements.