2020 (9) TMI 476 - Tri - Companies Law

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 ... Sanction of Scheme of Arrangement - sections 230 to 232 of the Companies Act, 2013 - HELD THAT:- The Petitioner Companies have complied with all the requirements as per directions of the Tribunal and have filed necessary affidavits of compliance in the Tribunal. Moreover, the Petitioner Companies through their Counsel undertake to comply with all statutory requirements, if any, as required under the Act and the Rules made there under as applicable. The undertakings given by the Petitioner Companies are accepted - The Regional Director (Western Region), Ministry of Corporate Affairs, Mumbai, has filed its Report dated 5th August, 2020, inter alia stating therein that save and except as stated in para IV (a) to (g) of the Report, the Scheme is not prejudicial to the interest of shareholders and public. In response to the observations made by the Regional Director, the Petitioner Company has also given necessary undertakings and clarification. The observations made by the Regional Director have been explained and the clarifications and undertakings given by the Petitioner Companies have been explained in Para 8 above. The Undertaking filed by the Petitioner Companies in response to the said report, is accepted by this Tribunal - From the material on record, the Scheme appears to be fair and reasonable and does not violate of any provisions of law and is not contrary to public policy. The Petition be and the same is allowed subject to the following. i. The Scheme, with the Appointed Date fixed as 1st October, 2019 placed at Page Nos. 655 to 669 of the CP (CAA) No. 940/230/MB-I/2020 is hereby sanctioned. It shall be binding on the Petitioner and the Companies involved in the Scheme and all concerned including their respective Shareholders, Secured Creditors, Unsecured Creditors/Trade Creditors and Employees. ii. The Registrar of this Tribunal shall issue the certified copy of this order along with the Scheme forthwith. The Petitioners are directed to file a copy of this Order along with a copy of the Scheme with the Registrar of Companies concerned, electronically in E-Form INC-28, within 30 days from the date of receipt of the Order from the Registry. iii. The Petitioner Companies to lodge a copy of this Order and the Scheme duly authenticated by the Deputy/Assistant Registrar of this Tribunal with the concerned Superintendent of Stamps, for the purpose of adjudication of stamp duty, if any, payable within 60 days from the date of receipt of the Order. iv. The Petitioner Company shall comply with the undertakings given by it. v. All concerned shall act on a copy of this Order along with Scheme duly authenticated by the Deputy/Assistant Registrar of this Tribunal. vi. The Petitioner Company is directed to issue newspaper publications with respect to approval of the Scheme, in the same newspapers in which previous publications were issued. vii. The Petitioner Company shall take all consequential and statutory steps required under the provisions of the Act in pursuance of the Scheme. viii. Any person interested in above matter shall be at liberty to apply to the Tribunal for any directions that may be necessary. 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.