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2019 (4) TMI 36 - AT - Companies LawScheme of amalgamation - certain companies in the scheme were carrying on NBFC activities and approval of the Reserve Bank of India had not been taken and the petition required to be rejected - reasonableness of the proposed exchange ratio could not be ascertained - financial assets are more than non-financial assets and income from operation is zero - HELD THAT:- If the transferor companies show "zero" income from operations and still show huge investments to be their assets, the Regional Director rightly observed that the intrinsic value of these investment (assets) is not known and the reasonableness of the proposed exchange ratio could not be ascertained. Such accounts showing "zero" income and showing huge investments as assets must be said to be not inspiring confidence. If there are huge investments as assets and it shows that financial assets are more than non-financial assets and income from operation is zero without its break up between financial income and non-financial income, the required criteria to determine the principal business of the company being finance company gets met. The National Company Law Tribunal not being satisfied from the case put up by the appellant declined to accept the scheme and we find it difficult to interfere with the impugned order. Even with or without the circular of the Reserve Bank of India dated October 19, 2006, keeping in view the above legal provisions, the appellants have not been able to satisfy the Regional Director or the National Company Law Tribunal that they are not involved in NBFC activities. Counsel for the appellants has not been able to satisfy us also. The appeal does not even plead that the appellants are not indulging in NBFC activities. The appeal memo while referring to the appellant-companies merely stated that the objects of the companies were as amended from time to time and which have been set out in the memorandum of association of the different companies. No such articles of association or memorandum of association have been produced before us to show what are aims and objects of these companies. No documents are shown as to what are the activities of these companies. Thus no material has been brought to satisfy that the impugned order is erroneous and deserves to be interfered with. Appeal dismissed.
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