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of <h1>Tribunal approves amalgamation scheme, allows virtual meetings for shareholders</h1> The Tribunal allowed the application for the scheme of amalgamation under Section 230(1)(b) of the Companies Act, 2013, dispensing with meetings for ... Sanction of Scheme of Amalgamation - Section 230(1)(b) of the Companies Act, 2013 - HELD THAT:- Various directions regarding holding and convening of meetings were issued - Various directions regarding issuance of various notices for the meetings were issued - application allowed - the scheme is approved. Issues Involved:1. Scheme of Amalgamation under Section 230(1)(b) of the Companies Act, 2013.2. Dispensation of meetings for preference shareholders, debenture holders, and secured creditors.3. Dispensation of meetings for unsecured creditors.4. Conducting meetings of equity shareholders.5. Compliance with procedural and regulatory requirements.Issue-wise Detailed Analysis:1. Scheme of Amalgamation under Section 230(1)(b) of the Companies Act, 2013:The application seeks orders for the amalgamation of Kimber-Clark India Private Limited (Transferor Company) with Kimber-Clark Hygiene Products Private Limited (Transferee Company). The rationale includes pooling resources, achieving economies of scale, simplifying the holding structure, and enhancing operational efficiencies. The amalgamation aims to bring potential synergies in procurement, manufacturing, distribution, and marketing, and to streamline regulatory and procedural compliances.2. Dispensation of meetings for preference shareholders, debenture holders, and secured creditors:The Counsel for the Applicant Companies submits that Applicant Company No. 1 has no preference shareholders or debenture holders, thus no meetings are required. Similarly, there are no secured creditors in Applicant Company No. 1, eliminating the need for such meetings. The same applies to Applicant Company No. 2, which also has no preference shareholders, debenture holders, or secured creditors.3. Dispensation of meetings for unsecured creditors:Applicant Company No. 1 has 84 unsecured creditors with an outstanding balance of Rs. 4,653,107,332/-. The convening of meetings is dispensed with due to the consent of 97.71% of unsecured creditors in value. Applicant Company No. 2 has 23 unsecured creditors with an outstanding balance of Rs. 383,077,756/-. Meetings are also dispensed with due to the consent of 98.16% of unsecured creditors in value.4. Conducting meetings of equity shareholders:Meetings for equity shareholders of both Applicant Companies are mandated to consider and approve the Scheme. For Applicant Company No. 1, the meeting is scheduled at Art Guild House, Mumbai on 18th August 2021 at 11:00 AM. For Applicant Company No. 2, the meeting is scheduled at the same venue on the same date at 12:00 PM. Notices must be issued at least 30 days prior, and advertisements must be published in specified newspapers. The Tribunal appointed specific individuals as Chairpersons for these meetings and mandated the filing of compliance reports.5. Compliance with procedural and regulatory requirements:The Tribunal directed the Applicant Companies to issue notices to various regulatory authorities, including the Central Government, Registrar of Companies, and Income Tax Authorities, and to serve notices upon sectoral regulators. The Tribunal appointed PRASS & Associates to scrutinize the books of accounts of Applicant Company No. 1 and Sharp & Tanan as the scrutinizer for the equity shareholders' meetings. The Tribunal emphasized compliance with all procedural requirements, including the filing of affidavits and reports in prescribed forms.Order:The Tribunal allowed the application, dispensing with the meetings of unsecured creditors due to their consents. It directed the convening of meetings for equity shareholders, with detailed instructions on issuing notices, advertisements, and appointing Chairpersons and scrutinizers. The Tribunal also provided for the possibility of conducting meetings through video-conferencing due to the Covid-19 pandemic and mandated the filing of compliance reports.
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