TaxTMI 
TaxTMI 
2021 (1) TMI 1027
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....he petition. It is stated that the Board of Directors of the First, Second and the Third Petitioner Companies in their respective meetings held on 5th February 2019, have approved the Scheme. 3. Heard the Learned Counsel for the Petitioner Companies. No objector has come before this Tribunal to oppose the Scheme nor has any party controverted any averments made in the Petition. The Learned Counsel for the Petitioners submits that: a. The First Petitioner Company is primarily engaged in the business of cereal and pulses and investment/financing (mostly in group entities). b. The Second Petitioner Company is primarily engaged in the business of trading of cereal and pulses and investment/financing (mostly in group entities). c. The Third Petitioner Company is engaged in the business of trading of commodities and investment/financing (mostly in group entities). 4. The Learned Counsel for the Petitioner Companies further submits the rationale for the Scheme is as follows: Prithavi Raj Jindal Group ("PRJ Group") is engaged in the diversified business of trading in wholesale commodities of cereals and pulses, manufac....
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...., 1934, as the entire asset portfolio of the Amalgamated Company would comprise of investment in group companies. (ii) The Scheme will provide a simplified structure and will enable dedicated management focus on both the operations and investment portfolio of the group; (iii) The merger of Amalgamating Companies into Amalgamated Company will result in reduction of overheads, administrative, managerial and other expenditure, and bring about operational rationalization, tax and organizational efficiency, and optimal utilization of various resources. (iv) The controlling stake in the Amalgamating Companies and Amalgamated Company are ultimately held by same set of shareholders. Consolidation of Amalgamating Companies and Amalgamated Company by way of Merger would result in streamlining the shareholding structure and thereby eliminating scattered shareholding; (v) The Merger of the Amalgamating Companies with the Amalgamated Company will also provide an opportunity to leverage combined assets and build a stronger sustainable business of the group. Specifically, the merger will enable optimal utilization of existing resou....
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....8 of the Petitioner Companies that the auditors have pointed out some observations in their report under the head of Emphasis of Matter, as under: Emphasis of Matter The statutory auditor of all petitioner companies has made remark in the financial statement FY 2018-19 as Emphasis of Matter that "In pursuance of section 45-IA of the RBI Act, 1934, the company is required to get registration under the aforesaid act to carry on the business of Investments based on the principal business criterion set out by the RBI" In this regard, it is mentioned in the scheme at para-B under rationale for the scheme that the consolidation will enable the group to have a dedicated single holding company for the entire group (i.e., Amalgamated Company). The groups intend to register such amalgamated company as a "Core Investment Company" with Reserve Bank of India in terms of Section 45-IA of the RBI Act, 1934, as the entire asset portfolio of the amalgamated company would comprise of investment in group companies. The Hon'ble NCLT may therefore be pleased to direct the petitioner transferee company to undertake with regard register such amalgamated company as ....
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.... NRI shareholders of Transferor Company I and Transferor Company 2 pursuant to the Scheme will be under the automatic route since the investment made by the NRI shareholders in on non-repatriation basis. b. By the Transferor Company 1 and Transferor Company does not have any other foreign shareholder. c. The Transferee undertakes to this Hon'ble Tribunal that the Transferee Company will comply with the provisions of FEMA and RBI guidelines w.r.t. Foreign National/NRI/Foreign Body Corporate holding shares in the Applicant Companies to the extent applicable. 9. From the material on record, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy. In view of the foregoing, upon considering the approval accorded by the members and creditors of the Petitioner Companies to the proposed Scheme, and the affidavits filed by the Regional Director, Ministry of Corporate Affairs, the reports of the official Liquidator etc., there appears to be no impediment in sanctioning the present scheme. Consequently, sanction is hereby granted to the scheme under Sections 230 to 232 of t....