2022 (4) TMI 658 - Tri - Companies Law

Guidelines for FM Radio Company's Scheme of Arrangement: Voting, Compliance, Preference Shares

The Tribunal provided detailed directions for conducting meetings, voting procedures, and ensuring compliance with statutory requirements for the Scheme ... Sanction of scheme of Arrangement - Section 230(4) read with Section 108 of the Companies Act, 2013 read with Rule 20 and other applicable provisions of the Companies (Management and Administration) Rules, 2014 and in accordance with Regulation 44(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 - HELD THAT:- Various directions with regard to holding, convening and dispensing with various meetings issued - directions with regard to issuance of notices also issued. The scheme is approved - application allowed. Issues Involved:1. Scheme of Arrangement2. Issuance of Non-Convertible Non-Cumulative Redeemable Preference Shares (NCRPS)3. Approval and Compliance with SEBI and Stock Exchanges4. Convening Meetings of Equity Shareholders and Unsecured Creditors5. Voting Procedures and Quorum6. Notices and Advertisements7. Appointment of Chairperson and ScrutinizerIssue-wise Detailed Analysis:1. Scheme of Arrangement:The Scheme of Arrangement involves Music Broadcast Limited (MBL) and its shareholders. MBL operates FM radio stations under the 'Radio City' brand and is a subsidiary of Jagran Prakashan Limited (JPL). The rationale behind the Scheme includes addressing the transformation in the radio industry and ensuring continued support from public shareholders.2. Issuance of Non-Convertible Non-Cumulative Redeemable Preference Shares (NCRPS):The Scheme proposes issuing NCRPS to non-promoter shareholders on a preferential basis by way of bonus. The face value of each NCRPS is Rs. 10, issued at a premium of Rs. 90, to be redeemed at Rs. 20 premium after 36 months. This issuance is pursuant to Section 230 and other relevant provisions of the Companies Act, 2013.3. Approval and Compliance with SEBI and Stock Exchanges:MBL's shares are listed on BSE and NSE. The company applied for and received 'No Objection Letters' from both exchanges, as required by SEBI Circular and Regulation 37 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.4. Convening Meetings of Equity Shareholders and Unsecured Creditors:The Tribunal directed that a meeting of the Equity Shareholders be held on June 7, 2022, via video conferencing. The meeting aims to consider and approve the Scheme. The Tribunal also directed the conduct of meetings for unsecured creditors through video conferencing to consider the Scheme of Demerger.5. Voting Procedures and Quorum:The facility of remote e-voting and e-voting during the meeting will be provided to Equity Shareholders. The quorum for the meeting is as prescribed under Section 103 of the Companies Act, 2013. Voting by proxy is not permitted for video conferencing meetings, but corporate bodies can vote through authorized representatives.6. Notices and Advertisements:Notices for the meetings must be sent by email to shareholders and creditors 30 days in advance. The notices will also be advertised in 'Financial Express' and 'Navshakti' (Mumbai editions). Due to COVID-19, online publication in e-newspapers is allowed. Notices must also be served to regulatory authorities, including the Central Government, Registrar of Companies, Income Tax Authorities, BSE, NSE, and SEBI.7. Appointment of Chairperson and Scrutinizer:Mr. Harnam Singh IAS (Retd.) is appointed as the Chairperson for the meetings of Equity Shareholders and unsecured creditors, with remuneration fixed at Rs. 3,00,000/-. The Chairperson has all necessary powers to conduct the meetings. C.A. Avinash Jagdish Purohit is appointed as the scrutinizer for the meetings, with remuneration fixed at Rs. 1,50,000/-.Conclusion:The Tribunal has provided comprehensive directions for conducting meetings, voting, and compliance with statutory requirements for the Scheme of Arrangement involving MBL and its shareholders. The Scheme aims to address industry challenges and ensure shareholder support through the issuance of NCRPS, with compliance ensured through regulatory approvals and proper conduct of meetings.