TaxTMI 
TaxTMI 
2017 (12) TMI 1877
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....rs submit that the Transferor Company is engaged in the business of an investment holding company. The Transferee Company is engaged in the business of import, manufacturing and export of rough & polished diamonds. 4. The Rational for the Scheme is that it will result in the following benefits : a. Simplified corporate structure and improved management. b. Greater integration and greater financial strength and flexibility for the amalgamated entity, which would result in maximizing overall shareholder value, and will improve the competitive position of the combined entity: c. Rationalization of administrative and compliance related costs; d. Greater efficiency in cash management of the amalgamated entity, and access to cash flow generated by the combined business which can be deployed more efficiently to fund organic and inorganic growth opportunities, to maximize shareholder value; e. Cost savings are expected to flow from more focused efforts and the elimination of duplication, and rationalization of administrative expenses and f. The combined operations are expected to give rise to capital efficiency and improved cash flows. 5. The leamed Counsel for the Peti....
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....ees one Hundred Crores only) M/s Dimexon Diamonds Limited, the Transferee Company has to issue shares. Accordingly , the Transferee Company to comply with RBI and FEMA Guidelines as applicable; (f) Since the cash consideration to be paid to M/s Dimexon International Holding BY Netherlands company, the share price per share arrived should be minimum of fair price determined as per FEMA guidelines . Hence valuer should certify that the price per share is as per FEMA guidelines. (g) As the Transferee Company km 100% subsidiary of the Transferor Company , Hon'ble Tribunal may kindly direct the 7 companies involved in the scheme to file Solvency Certificate with the Register of Companies , Mumbai, as required u/s 233(l)(c) read with section 233(12) and 234(l) of the Companies Act, 2013 and pass appropriate order(s) as deem fit. (h) In view of the objection raised by ROC Mumbai, mentioned at para 11 above Hon'ble NCLT may pass appropriate orders as deem fit. 7. ln so far as observations made in paragraph IV (a) of the Report of Regional Director is concerned, the Transferee Company through their Counsel undertakes that in addition to compliance of 1AS- 14 (IND AS- 103)....
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....NBFC activity as part of transferee 's name. (ii) Solvency Certificate etc. is required to be fled u/s. 233(1)(c) read with Section 233(12) of the Companies Act, 2013 as the scheme is between holding company & its wholly owned subsidiary company. (iii) Merger record dote should be the "Appointed date" instead of future determination by Board of Director as referred in para 1.9 of the Scheme. (iv) As the reference to cross Border lndia-Netherlands Double Taxation Avoidance Agreement is referred in para 1.15 & 3.2 of the scheme, RBI's approval (FEMA) may be obtained, also considering that the sole shareholder of the Transferor Company to whom share being issued is foreign company. (v) Valuation per share (as consideration) shall not be less than the FEMA Guidelines Price, & to that effect authorized Value need to certify. (vi) Separate Notice to RBI (FEMA/FE Deportment) & RBI (NBFC/DNBS Department) need to be issued as Rs 100 crores cash consideration sought to be paid to foreign shareholders etc., & Transferor being an NBFC. (vii) It is a case of Reverse Merger i.e. Holding company merging into its Subsidiary Company (100%). Hence the enabling Board Resolut....
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....nt companies (Reserve Bank ) Directions, 2011 as on 31st December 2016, hence it is exempted from registration under section 451A of the Reserve Bank of India Act, 1934 vide Notification No. DNBS . PD220/CGM(US)2011 dated January 5, 2011 and also does not require registration as Core Investment Company with Reserve Bank of India under Notification No. DNBS.PD/221/CGM(US)2011 dated January, 2011 The Counsel for Petitioners therefore submit there is no need to amend object clause of the Memorandum of Association of the Transferee Company. In so far as compliance under the FEMA Regulations, the Transferee Company through their Counsel undertakes to comply with Regulation 7 of Foreign Exchange Management (Transfer of security by a person resident outside India) Regulation 2000 as amended form time to time. 16. In so far as observations made in paragraph 11 (ii) of the Report of Regional Director pertaining to ROC's observations is concerned, the Counsel for Petitioners submits that the present petition is filed under sections 230 to 232 of the Companies Act, 2013 and therefore solvency certificate as required under section 233 of the Companies Act, 2013 is not applicable in the pr....