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In Re : ZYG PHARMA PRIVATE LIMITED

2016 (2) TMI 551 - GUJARAT HIGH COURT

Scheme of Amalgamation - Held that:- Considering the totality of the above facts and circumstances and taking into account the contentions raised in the affidavits and reply affidavits and the submissions advanced during the course of hearing, this Court is of the view that the observations made by the Regional Director, Ministry of Corporate Affairs, have been answered. It appears from the record that the present Scheme of Arrangement will be in the interest of the shareholders and creditors of .....

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o a Scheme of Amalgamation of the petitioner Transferor Company viz. Zyg Pharma Private Limited with Torrent Pharmaceuticals Limited, the Transferee Company, proposed under Sections 391 to 394 of the Companies Act, 1956. 2. It has been submitted that the petitioner Transferor Company is a Wholly Owned Subsidiary of Torrent Pharmaceuticals Limited, the Transferee Company, which is a listed public limited Company having its shares listed on BSE Limited and National Stock Exchange (India) Limited. .....

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ies belong to the same group of management and are engaged in the same industrial sector viz. Pharmaceuticals, the amalgamation is proposed with a view to achieve synergic benefits by consolidating the activities of both these entities. It is envisaged that the abovereferred arrangement would, inter alia, have the following benefits: (a) Concentrated management focus and synergies of operations; (b) Facilitating inter transfer of resources and optimum utilisation of assets; (c) Reduction in mult .....

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hat the Equity Shares of the Transferor Company, which are held by the Transferee Company, shall stand automatically cancelled and in lieu thereof, no new shares shall be issued by the Transferee Company. It was further submitted that considering the fact that the Capital Structure of the Transferee Company shall not undergo any change, the rights and interests of the existing shareholders of the Transferee Company are not affected in any manner. In view of the same, it was prayed that the Holdi .....

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15. Further, compliance of Clause 5.16(a) of the SEBI circulars dated 4th February 2013 and 21st May 2013 was also not necessary, since no new shares of the Transferee Company are to be issued. The Company had already submitted the requisite Undertaking and the Auditor's certificate to the SEBI and copies of the same were also placed on record. In light of the above facts and circumstances, the Company was not required to undertake the procedure of postal ballot and 'e' voting for se .....

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ransferor Company. 7. The substantive petition for the sanction of the Scheme was filed by the Transferor Company only and the same was admitted on 22nd December 2015. The notice for the hearing of the petitions was duly advertised in the Ahmedabad editions of English daily newspaper 'Indian Express' and the Gujarati daily newspaper 'Sandesh' dated 31st December 2015, and the publication in the Government gazette was dispensed with, as directed in the said order. Pursuant to the .....

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the Official Liquidator that the affairs of the Transferor Company have been conducted within its object clauses and have not been conducted in any manner prejudicial to the interest of the members or public interest; hence the petitioner Transferor Company may be dissolved without following the process of winding up. However, the Official Liquidator has requested that directions be issued to preserve the books of accounts, papers and records and not to dispose of the same without the prior per .....

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ny of its statutory liabilities. 10. Notice of the petition has been served upon the Central Government and Mr.Kshitij Amin, learned Central Government Standing Counsel appeared on behalf of Mr.Devang Vyas, learned Assistant Solicitor General of India for the Central Government. An affidavit dated 28th January 2016 has been filed by Mr.Shambhu Kumar Agarwal, the Regional Director, NorthWestern Region, Ministry of Corporate Affairs, whereby several observations have been made. 11. The attention o .....

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Director that the Transferor Company, viz. Torrent Pharmaceuticals Limited, being a listed Company, had approached the concerned stock exchanges, viz. BSE Limited and National Stock Exchange of India Limited, and obtained the requisite observation letters from the said exchanges. However, under the SEBI circulars dated 4th February 2013 and 21st May 2013, the approval from SEBI has to be obtained. In this regard, it has been submitted that the said Transferee Company was required to obtain SEBI .....

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required to undertake any procedure for approval of the Scheme from its Public Shareholders by Postal ballot and 'e' voting, in light of the Certificate from its Chartered Accountant confirming the nonapplicability of Clause 5.16(a) of the SEBI Circular and Undertaking given by the petitioner Company. Since the Transferee Company has already complied with the said SEBI circulars, no further directions are required to be issued. (ii) The observation made vide Paragraph 2(e) refers to par .....

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e relevant and applicable rules and regulation including provisions of FEMA. In view of the same, no further directions are required to be issued to the petitioner in this regard. (iii) The observation of the Regional Director made vide Paragraph 2(f) pertains to the Accounting Treatment as envisaged under Clause 11 of the Scheme. It is contended that the excess of the assets over liabilities should be reflected as Capital Reserve Account. In this regard, it has been submitted that Clause 11.2 o .....

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) The observation of the Regional Director made vide Paragraph 2(g) pertains to letter dated 6th January 2016 sent by the Regional Director to the Income Tax Department, inviting their objections, if any. Since the statutory period of 15 days, as envisaged by the relevant circular of the Ministry of Corporate Affairs is over, it can be presumed that the Income Tax Department has no objection to the proposed Scheme of Arrangement. The petitioner Company has agreed to comply with the applicable pr .....

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ve facts and circumstances and taking into account the contentions raised in the affidavits and reply affidavits and the submissions advanced during the course of hearing, this Court is of the view that the observations made by the Regional Director, Ministry of Corporate Affairs, have been answered. It appears from the record that the present Scheme of Arrangement will be in the interest of the shareholders and creditors of all the companies as well as the public interest and the same deserves .....

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