2021 (1) TMI 315 - Tri - Companies Law

Tribunal approves Amalgamation Scheme, directs compliance with regulatory filings and statutory requirements

The Tribunal sanctioned the Scheme of Amalgamation of the Transferor Companies with the Transferee Company, effective from 01.04.2019, and disposed of the ... Approval of Scheme of Amalgamation of the Transferor Companies with the Transferee Company - Section 230 read with Section 232 of the Companies Act, 2013 - HELD THAT:- It appears that paper publication under Rule 16 has been affected on 14.11.2020 in two Newspapers, i.e. in Times of India (English)and Janmabhoomi (Malayalam) and no one has filed objection against the Scheme of Amalgamation of the Petitioner Companies. During the course of hearing on 01.12.2020, the learned counsel for Petitioners submitted that the Appointed date has been changed from 01.04.2017 to 01.04.2019 as directed by the Regional Director. It is further stated that the Scheme has also been revised taking into consideration of the report of the Official Liquidator and the Registrar of Companies. This Bench is of the view that the Scheme placed before this Bench on 27.11.2020 after carrying out necessary amendments and change of appointed date from 01.04.2017 to 01.04.2019, may be sanctioned. Hence, this Tribunal Sanction the Scheme of Amalgamation of M/s. Toonz Infrastructure Private Limited and M/s. Toonz Animation India Private Limited with M/s. Asian Institute of Films and Media Studies Private Limited and the appointed date of the Scheme is fixed as opening hours of 01st April, 2019. The Transferee Company is directed to comply with the provisions of Section 232 (3) (i) of the Companies Act, 2013 by making an application with Registrar of Companies, Kerala for payment of the balance fee as applicable under the provisions of Acts and Rules framed thereunder - the scheme is approved. Issues Involved:1. Compliance with statutory actions and presentation of the petition.2. Benefits and features of the Scheme of Amalgamation.3. Objections and compliance with regulatory requirements.4. Conduct of business and treatment of employees until the Effective Date.5. Issuance and cancellation of shares.6. Compliance with Section 232 (3) (i) of the Companies Act, 2013.7. Filing of amended Memorandum and Articles of Association.8. Payment of fees for enhanced authorized capital.9. Objections raised by the Official Liquidator.10. Sanctioning of the Scheme of Amalgamation.Detailed Analysis:1. Compliance with statutory actions and presentation of the petition:The petitioners filed the Company Petition TCP (CAA)/04/KOB/2020 following the directions from the NCLT Chennai Bench to comply with all statutory actions and present the petition within one week of the Chairman's report on the creditors' meetings. The Scheme of Amalgamation was produced on 27.11.2020, duly notarized.2. Benefits and features of the Scheme of Amalgamation:The amalgamation aims to integrate the management and operational activities of the Transferor Companies (M/s. Toonz Infrastructure Private Limited and M/s. Toonz Animation India Private Limited) with the Transferee Company (M/s. Asian Institute of Films and Media Studies Private Limited). The benefits include synergetic advantages, pooling of resources, increased financial strength, operational efficiency, cost savings, and a stronger global competitive position. The Scheme defines the 'Appointed Date' as April 1, 2017, and the 'Effective Date' as the date when all conditions are fulfilled.3. Objections and compliance with regulatory requirements:The Regional Director, Ministry of Corporate Affairs, raised no objections except for compliance with Section 232 (3) (i) of the Companies Act, 2013, and changing the appointed date to 01.04.2019. The Transferee Company must file the amended Memorandum of Association (MoA) and Articles of Association (AoA) with the Registrar of Companies, Kerala.4. Conduct of business and treatment of employees until the Effective Date:From the Appointed Date to the Effective Date, the Transferor Companies will carry on business in trust for the Transferee Company. Employees' terms and conditions will remain uninterrupted and favorable, with continuous service considered for retirement benefits. The Transferee Company will assume all rights and obligations related to employee benefit funds.5. Issuance and cancellation of shares:Upon the Scheme's effectiveness, the Transferee Company will issue shares to the shareholders of the Transferor Companies based on a specified ratio. Existing share certificates of the Transferor Companies will be canceled, and the Transferor Companies will be dissolved without winding-up. The new shares will rank pari passu with existing shares of the Transferee Company.6. Compliance with Section 232 (3) (i) of the Companies Act, 2013:The Transferee Company must comply with Section 232 (3) (i) by applying to the Registrar of Companies, Kerala, for payment of the balance fee as per the provisions of the Act and Rules.7. Filing of amended Memorandum and Articles of Association:The Transferee Company is directed to file the amended MoA and AoA with the Registrar of Companies, Kerala, to reflect the changes post-amalgamation.8. Payment of fees for enhanced authorized capital:The Transferee Company must pay fees for the enhanced authorized capital after setting off the fees paid by the Transferor Company.9. Objections raised by the Official Liquidator:The Official Liquidator, supported by the Chartered Accountant's report, found no prejudicial conduct by the Transferor Companies. However, an objection was raised regarding the Memorandum of Association of the 1st Transferor Company, which mandates amalgamation with companies having similar objects.10. Sanctioning of the Scheme of Amalgamation:The Tribunal sanctioned the Scheme of Amalgamation with the appointed date changed to 01.04.2019. The order directs regulatory authorities to act on the certified Scheme, requires filing with the Registrar of Companies, and mandates compliance with various statutory requirements, including the adjudication of stamp duty and filing of the amended MoA and AoA.Conclusion:The Tribunal sanctioned the Scheme of Amalgamation of the Transferor Companies with the Transferee Company, effective from 01.04.2019, and disposed of the petition TCP (CAA)/04/KOB/2020 on January 6, 2021.