2020 (9) TMI 379 - Tri - Companies Law

Tribunal approves merger of Wellworth Capital Services with Wellworth Financial Services

In Re : Wellworth Capital Services Private limited, Wellworth Financial Services Private limited

The Tribunal sanctioned the Scheme of Amalgamation (Merger by Absorption) of Wellworth Capital Services Private Limited with Wellworth Financial Services ... Sanction of Amalgamation scheme - Sections 230 to 232 of the Companies Act, 2013 - HELD THAT:- The Scheme appears to be fair and reasonable and does not violate any provisions of law and is not contrary to public policy or public interest - Since all the requisite statutory compliances have been fulfilled, Petition have been made absolute in terms of prayer Clause 32(a) of the Petition mentioned therein. The Scheme of Amalgamation (Merger by Absorption) is sanctioned hereby, and the Appointed Date of the Scheme is 1stApril, 2019. The Transferor Company is dissolved without winding up - The Petitioner Companies are directed to lodge a certified copy of this order and the Scheme of Amalgamation (Merger by Absorption) with the concerned Superintendent of Stamps, for the purpose of adjudication of stamp duty payable, if any, on the same within 60 days from the date of receipt of the order. Petition allowed subject to conditions imposed. Issues Involved:1. Sanction of the Scheme of Amalgamation under Sections 230 to 232 of the Companies Act, 2013.2. Compliance with statutory requirements and Accounting Standards.3. Observations and objections from the Regional Director and Official Liquidator.4. Protection of creditors' interests.5. Compliance with procedural requirements for the merger.Issue-wise Detailed Analysis:1. Sanction of the Scheme of Amalgamation:The Petitioner sought the tribunal's sanction for the Scheme of Amalgamation of Wellworth Capital Services Private Limited (Transferor Company) with Wellworth Financial Services Private Limited (Transferee Company) under Sections 230 to 232 of the Companies Act, 2013. The Tribunal, convened via videoconferencing, noted that no objections were raised against the Scheme. The Petitioner Companies had approved the Scheme through Board Resolutions passed on December 9, 2019, and subsequently approached the Tribunal for its sanction.2. Compliance with Statutory Requirements and Accounting Standards:The Regional Director's report emphasized the need for compliance with AS-14 (IND AS-103) and other applicable Accounting Standards such as AS-5 (IND AS-8). The Petitioner Companies undertook to pass necessary accounting entries in connection with the Scheme and comply with all relevant Accounting Standards. The appointed date for the Scheme was confirmed as April 1, 2019, in accordance with Section 232(6) of the Companies Act, 2013.3. Observations and Objections from the Regional Director and Official Liquidator:The Regional Director's report highlighted several observations, including the need for compliance with various sections of the Companies Act, 2013, and the requirement to file the order with the RBI within 30 days. The Petitioner Companies provided undertakings to address these observations, confirming compliance with all necessary provisions and statutory requirements. The Official Liquidator's report stated that the affairs of the Transferor Company were conducted properly and recommended its dissolution without winding up.4. Protection of Creditors' Interests:The Tribunal emphasized the protection of creditors' interests, as noted in the Regional Director's report and the ROC's observations. The Petitioner Companies undertook to protect the interests of creditors and confirmed that the Scheme was approved unanimously by the members. The Tribunal accepted these undertakings, ensuring that the creditors' interests were safeguarded.5. Compliance with Procedural Requirements for the Merger:The Petitioner Companies confirmed compliance with all procedural requirements, including serving notices to concerned authorities and filing necessary affidavits. The Tribunal directed the Petitioner Companies to file a certified copy of the order and the Scheme with the Registrar of Companies and the Superintendent of Stamps within specified timeframes. The Scheme was found to be fair, reasonable, and compliant with legal provisions, and the Tribunal sanctioned the Scheme with the appointed date as April 1, 2019.Conclusion:The Tribunal sanctioned the Scheme of Amalgamation (Merger by Absorption) of Wellworth Capital Services Private Limited with Wellworth Financial Services Private Limited, effective from April 1, 2019. The Transferor Company was ordered to be dissolved without winding up. The Petitioner Companies were directed to comply with all statutory and procedural requirements, including filing and publication obligations. The Tribunal's order is binding on all concerned parties, including shareholders, creditors, and employees. Any interested person may apply to the Tribunal for necessary directions.