Reduction of share capital sanctioned after compliance, creditor protection undertakings, and tax objections were satisfactorily addressed.

A petition for reduction of share capital was considered where objections concerned the proposed payout, protection of creditors and stakeholders, and tax implications. The company addressed those concerns through affidavits and supplementary compliance, showing sufficient funds to meet the consideration payable and undertaking to protect creditors, stakeholders, and Government revenue while complying with tax and statutory requirements. The Tribunal found that the statutory procedure had been completed and that no remaining impediment justified of relief. The proposed reduction was sanctioned.

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Issues: Whether the petition seeking reduction of share capital should be sanctioned.

Analysis: The objections raised by the Regional Director regarding the proposed payout, protection of creditors and stakeholders, and tax implications were addressed by the company through affidavits and supplementary compliance. The company established that it had sufficient funds to meet the consideration payable on reduction and undertook to protect the interests of creditors, stakeholders and Government revenue, as well as to comply with applicable tax laws and statutory requirements. The Tribunal found that the requisite statutory procedure had been fulfilled and that no impediment remained to grant the relief sought.

Conclusion: The petition for reduction of share capital was allowed and the proposed reduction was sanctioned.

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