2021 (11) TMI 956 - Tri - Companies Law

Approval of Amalgamation Scheme for Three Companies under Companies Act, 2013

Desai Finwealth Investments & Securities Private Limited Versus Onward Network Technologies Private Limited and Ors.

The judgment approved a Composite Scheme of Amalgamation and Arrangement under the Companies Act, 2013, involving three Applicant Companies. The Scheme ... Sanction of Composite Scheme of Amalgamation and Arrangement - Sections 230 to 232 read with Section 66 of the Companies Act, 2013 - HELD THAT:- Various directions with regard to holding, convening and dispensing with various meetings issued - directions with regard to issuance of various notices also issued. The scheme is approved - application allowed. Issues Involved:- Approval of Composite Scheme of Amalgamation and Arrangement under Companies Act, 2013- Rationale for the proposed amalgamation- Financial details of the Applicant Companies- Dispensation of convening and holding meetings of Equity Shareholders- Certification of absence of Secured and Unsecured Creditors- Serving notices to regulatory authorities- Appointment of Official Liquidator for scrutiny of books of accountsApproval of Composite Scheme of Amalgamation and Arrangement under Companies Act, 2013:The judgment discusses a Composite Scheme of Amalgamation and Arrangement between three Applicant Companies under Sections 230 to 232 read with Section 66 of the Companies Act, 2013. The Scheme involves the amalgamation of Transferor Company, Transferee Company/Demerged Company, and Resulting Company, with their respective shareholders and creditors. The Board of Directors of the companies approved the Scheme, with the Appointed Date set as 1 April 2020.Rationale for the proposed amalgamation:The judgment outlines the rationale behind the proposed amalgamation, emphasizing the benefits of restructuring. It mentions the reduction in legal and regulatory compliances, avoidance of duplication of administrative functions, and elimination of multiple record-keeping. The Scheme aims to streamline investments and real estate business, demerge Securities Investments Business into a separate company, and enhance focus on operations for maximizing stakeholder value.Financial details of the Applicant Companies:Detailed financial summaries of the Applicant Companies are provided, reflecting their revenues and profit/loss figures for the years 2019 and 2020. The financial data highlights the performance and standing of each company as of 31st December 2020, supporting the rationale for the proposed amalgamation and demerger.Dispensation of convening and holding meetings of Equity Shareholders:The judgment mentions the dispensation of convening and holding meetings of Equity Shareholders for all three Applicant Companies, supported by Consent Affidavits from 100% Equity Shareholders. This dispensation streamlines the approval process for the Scheme, ensuring efficient decision-making.Certification of absence of Secured and Unsecured Creditors:The judgment confirms the absence of Secured and Unsecured Creditors in the Applicant Companies as of 31st December 2020, as certified by a Chartered Accountant. This certification is crucial for the approval and implementation of the Scheme, indicating the financial stability of the companies involved.Serving notices to regulatory authorities:The judgment directs the Applicant Companies to serve notices to various regulatory authorities, including the Regional Director, Registrar of Companies, Income Tax Authority, and Goods and Service Tax Authority. The service of notices is essential for seeking approvals and objections, ensuring compliance with legal requirements under the Companies Act, 2013.Appointment of Official Liquidator for scrutiny of books of accounts:The judgment appoints an Official Liquidator to scrutinize the books of accounts of the Transferor Company for the last 5 years. The Official Liquidator is tasked with submitting a representation/report to the Tribunal, with the Transferor Company bearing the associated fees. This appointment ensures transparency and compliance with regulatory standards in the amalgamation process.In conclusion, the judgment comprehensively addresses the legal aspects and procedural requirements related to the approval and implementation of the Composite Scheme of Amalgamation and Arrangement between the Applicant Companies, emphasizing financial details, shareholder approvals, absence of creditors, and adherence to regulatory protocols.