Approval of Media Merger Scheme under Companies Act, 2013: Streamlining Operations and Unlocking Value

The Tribunal sanctioned the Scheme of Arrangement under sections 230 to 232 of the Companies Act, 2013 between IndusInd Media And Communications Limited (Demerged Company) and NxtDigital Limited (Resulting Company). The restructuring aims to consolidate the media and communications business, streamline operations, and unlock shareholder value. The Scheme was approved by shareholders and creditors, with compliance to statutory requirements and observations of the Regional Director. The Tribunal directed the Petitioner Companies to fulfill filing and publication requirements post-approval, ensuring compliance with all statutory and procedural steps.

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Issues Involved:
1. Sanction of the Scheme of Arrangement under sections 230 to 232 of the Companies Act, 2013.
2. Compliance with statutory requirements and observations of the Regional Director.
3. Approval and procedural compliance of the Scheme by the shareholders and creditors.
4. Filing and publication requirements post-approval of the Scheme.

Issue-Wise Detailed Analysis:

1. Sanction of the Scheme of Arrangement:
The petition seeks sanction under sections 230 to 232 of the Companies Act, 2013, for the Scheme of Arrangement between IndusInd Media And Communications Limited (Demerged Company) and NxtDigital Limited (Resulting Company) and their respective shareholders. The Scheme was approved by the Board of Directors on 27th August 2019, with the Appointed Date fixed as 1st October 2019. The restructuring aims to consolidate the media and communications business, streamline operations, and unlock shareholder value.

2. Compliance with Statutory Requirements and Observations of the Regional Director:
The Regional Director's report dated 5th August 2020 raised several observations, which the Petitioner Companies addressed through undertakings and clarifications:
- Compliance with AS-14 (IND AS-103) and other applicable Accounting Standards.
- Confirmation of the Appointed Date as 1st October 2019, with compliance to the circular issued by the Ministry of Corporate Affairs.
- Approval of the Scheme by the requisite majority of members and creditors, with minutes of the meetings submitted to the Tribunal.
- Filing of an affidavit confirming that the Scheme enclosed to the Company Application and Petition is the same.
- Serving notices to concerned authorities as per section 230(5) of the Companies Act, 2013.
- Compliance with directions issued by BSE and NSE regarding the listing of equity shares.

3. Approval and Procedural Compliance of the Scheme by Shareholders and Creditors:
The Scheme was approved unanimously by the Equity Shareholders of the Demerged Company in a meeting held through video conferencing on April 15, 2020. The meeting of the Equity Shareholders of the Resulting Company was dispensed with due to the COVID-19 pandemic, and votes cast via remote e-voting/postal ballot were considered as final consent.

4. Filing and Publication Requirements Post-Approval of the Scheme:
The Tribunal sanctioned the Scheme, with the Appointed Date fixed as 1st October 2019. The Petitioner Companies are directed to:
- File a copy of the Order along with the Scheme with the Registrar of Companies electronically in E-Form INC-28 within 30 days.
- Lodge a copy of the Order and the Scheme with the concerned Superintendent of Stamps for adjudication of stamp duty within 60 days.
- Issue newspaper publications regarding the approval of the Scheme in the same newspapers where previous publications were issued.
- Take all consequential and statutory steps required under the provisions of the Act in pursuance of the Scheme.

Conclusion:
The Scheme of Arrangement is deemed fair and reasonable, does not violate any provisions of law, and is not contrary to public policy. The Tribunal accepted the undertakings and clarifications provided by the Petitioner Companies and sanctioned the Scheme, directing compliance with all statutory and procedural requirements.

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