Approval of Demerger Scheme between Companies: Compliance with Statutory Requirements Emphasized

The Tribunal approved the Scheme of Arrangement between two companies, demerging the business of owning and operating Exora Business Parks into a resulting company. The objections and observations raised by the Regional Director and Registrar of Companies were addressed, leading to the approval of the Scheme, binding on all shareholders and creditors. The companies were directed to comply with statutory requirements, including tax liabilities, CSR spending, and depositing specified amounts. Compliance with relevant laws was emphasized, and formal orders were to be issued accordingly.

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Issues Involved:
1. Sanction of Scheme of Arrangement.
2. Compliance with statutory requirements.
3. Objections and observations from the Regional Director (RD) and Registrar of Companies (RoC).
4. Tax liabilities and statutory dues.
5. Corporate Social Responsibility (CSR) compliance.
6. Approval and binding nature of the Scheme.

Detailed Analysis:

1. Sanction of Scheme of Arrangement:
The petition was filed under Sections 230 and 232 of the Companies Act, 2013, seeking the sanction of a Scheme of Arrangement between Prestige Exora Business Parks Limited (Demerged Company) and Pluto Cessna Business Parks Private Limited (Resulting Company). The Tribunal noted that the joint petition is maintainable under Rule 3(2) of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. The Scheme aims to demerge the business of owning and operating Exora Business Parks into the Resulting Company.

2. Compliance with Statutory Requirements:
The Petitioner Companies had previously filed a First Motion Application seeking to dispense with the meetings of various classes of shareholders and creditors, which was granted by the Tribunal on 03.02.2022. Notices for the hearing were advertised in specified newspapers and served upon relevant authorities, including the Regional Director, Registrar of Companies, Income Tax Department, and Reserve Bank of India.

3. Objections and Observations from RD and RoC:
The Regional Director (RD) and Registrar of Companies (RoC) filed their reports, raising several observations:
- The Demerged Company is a wholly-owned subsidiary of a listed company, and the Resulting Company is a wholly-owned subsidiary of a foreign entity. Justification for the demerger and its impact on public interest was required.
- Compliance with SEBI Regulations and stock exchange norms was necessary.
- Clarification on the appointed date of 10.03.2021 was sought.
- The rationale behind the demerger and share exchange ratio was questioned.
- Compliance with Sections 185 and 186 of the Companies Act, 2013, regarding intercorporate deposits was required.
- Statutory dues and MSME dues needed to be addressed.
- CSR spending discrepancies were noted.

4. Tax Liabilities and Statutory Dues:
The Income Tax Department highlighted outstanding demands for the Demerged Company for the accounting years 2017-2018 and 2018-2019. The Petitioner Companies undertook to pay all tax liabilities and statutory dues as and when they arise.

5. Corporate Social Responsibility (CSR) Compliance:
The Tribunal directed the Petitioner Companies to file a fresh affidavit regarding CSR spending. The Demerged Company confirmed that it had spent the required amount towards CSR contributions for the financial year ending 31st March 2021.

6. Approval and Binding Nature of the Scheme:
The Tribunal concluded that the objections and observations from the RD and RoC were adequately addressed by the Petitioner Companies. Consequently, the Scheme was approved and declared binding on all shareholders and creditors of both the Demerged and Resulting Companies. The order clarified that it should not be construed as granting exemption from payment of stamp duty, taxes, or other charges.

Final Orders:
- The Petitioner Companies were directed to deliver a certified copy of the order to the Registrar of Companies, Karnataka, within 30 days.
- The Resulting Company was instructed to deposit specified amounts with the Pay & Accounts Office and the Prime Minister's National Relief Fund.
- The approval of the Scheme did not exempt the companies from compliance with the Income Tax Act, 1961, or the Companies Act, 2013.
- Formal orders were to be issued upon filing of the Schedule Property by way of affidavit.

The petition was disposed of, and a copy of the order was communicated to the PCS for the Petitioner Companies.

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