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2010 (5) TMI 399 - HIGH COURT OF CALCUTTAScheme of Arrangement by demerger - Held that:- The Scheme, sanction of which is sought seeks demerger of the seed division from the investment division. This does not, however, seem to be the sole purpose of the Scheme. It also seeks conversion of the Zero Coupon Redeemable Preference Shares (ZCRPS) and Zero Coupon Non-Convertible Bonds (ZCNCB) given under the 2003 Scheme.By such conversion J.K. Industries Ltd. (JKIL), the promoter-company acquires shares in Florence Alumina Ltd. (FAL), the applicant No. 2 whereby its shareholding increases. This increase will not benefit any shareholder except the promoters. Therefore, the conversion contemplated will benefit the promoters and none else. This cannot be the intention of the propounders of the Scheme. The conversion is intended to promote the interest of JKIL which is a separate class and a meeting of such class ought to have been called as held in 1975 (3) AER 382 to ascertain the intention of its shareholders with regard to acceptance of the arrangement. Thus this application for sanction of Scheme of Arrangement and Demerger is rejected.
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