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Tribunal Grants Capital Reduction Scheme: Share consolidation, loss write-off approved The Tribunal approved the Applicant's scheme of Capital Reduction under Section 66 of the Companies Act, 2013. The reduction of paid-up share capital by ...
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Tribunal Grants Capital Reduction Scheme: Share consolidation, loss write-off approved
The Tribunal approved the Applicant's scheme of Capital Reduction under Section 66 of the Companies Act, 2013. The reduction of paid-up share capital by 68%, consolidation of shares, and writing off accumulated losses were granted after the Applicant fulfilled all statutory requirements, including obtaining necessary approvals, passing special resolutions, and submitting relevant documents. The Tribunal directed the Applicant to notify authorities, publish notices, and file an affidavit confirming compliance within a specified timeframe, with objections allowed within three months. The Application was set for a hearing on a specified date for additional orders.
Issues: 1. Application for scheme of Capital Reduction under Section 66 of the Companies Act, 2013.
Analysis: The Applicant filed an Application seeking approval for a scheme of Capital Reduction under Section 66 of the Companies Act, 2013. The reliefs sought included the reduction of paid-up share capital by 68%, from Rs. 10 to Rs. 3.20 per share, consolidation of shares, and writing off accumulated losses. The Applicant passed special resolutions and obtained necessary approvals for the reduction. The Statutory Auditors confirmed the proposed accounting treatment's conformity with the prescribed standards.
The Applicant Company's share capital structure was detailed, including authorized, issued, subscribed, and paid-up capital. The Company had no partly paid-up shares or other classes of shares. The Statutory Auditors certified the absence of secured creditors, debentures, and unsecured creditors as of a specified date. The Company's Articles of Association empowered reduction of shares through a special resolution.
The Director of the Applicant Company declared no arrears in deposit repayments, supported by the Statutory Auditor's certificate. The Company's Managing Director and Director affirmed the absence of secured and unsecured creditors. The Applicant Company complied with the Act and rules by submitting relevant documents, including a certificate from the Statutory Auditor on the accounting treatment for share capital reduction.
The Tribunal directed the Applicant to notify relevant authorities, publish notices in specified newspapers, and upload information on its website regarding the Application. The Applicant was instructed to file an affidavit confirming notice dispatch and publication within a specified timeframe. Authorities receiving notices were granted three months to raise objections. The Application was scheduled for a hearing on a specified date for further orders.
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