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2016 (5) TMI 2 - GUJARAT HIGH COURT

2016 (5) TMI 2 - GUJARAT HIGH COURT - TMI - Scheme of Arrangement in the nature of Amalgamation - Held that:- Taking into account all the contentions raised by the affidavits and counteraffidavits, as well as the submissions advanced during the course of hearing, this Court is satisfied that the observations made by the Regional Director, Ministry of Corporate Affairs, have been satisfactorily redressed. It appears to this Court that the present Scheme of Arrangement would be in the interest of .....

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n the nature of Amalgamation of the five Transferor Companies viz. Kanvel Finance Private Limited, Kanvel Oil and Gas Private Limited, Prabhavati Properties Private Limited, Savla Enterprise Private Limited and Yash Organochem Private Limited with Deep Industries Limited, the Transferee Company, as well as restructure of share capital of Deep Industries Limited, proposed under Sections391 to 394 read with Sections100 to 103 of the Companies Act, 1956. 2. It has been submitted that Deep Industrie .....

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mpany had sought the requisite approvals from SEBI through the Stock Exchanges, and the relevant observation letters have been placed on record. 3. It has been further submitted that all the Transferor Companies belong to the same group of management known as Deep group. Four of them have been the promoter companies and hold shares of the Transferee Company. The amalgamation is proposed in order to streamline the current holding structure and make it more efficient. The petitions give in detail, .....

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No.376 of 2015, the meeting of the Unsecured Creditors of the Transferee Company was dispensed with, in view of the substantially positive Net Worth of the Transferee Company in both the preScheme and Postscheme scenarios. It was submitted by the petitioner Transferee Company that the rights and interests of the Unsecured Creditors of the Transferee Company shall not be prejudicially affected as a result of the Scheme. However, separate meetings of the Equity Shareholders and Secured Creditors .....

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nution of liability in respect of unpaid share capital or payment to any shareholder of any paidup share capital and the order of the Court sanctioning the Scheme shall be deemed to be an order under Section 102 of the Companies Act, 1956, confirming the reduction. It has been further clarified that considering the issue of new shares of the Transferee Company to be issued to the shareholders of the Transferor Companies, as envisaged in Clause10 of the Scheme, there shall not be any Net Reductio .....

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r 2015, the procedure prescribed under Section101( 2) of the Companies Act, 1956 and under rule 48 to 65 of the Companies (Court) Rules 1959, was dispensed with. 6. Pursuant to the directions issued vide the order dated 9th December 2015, the meetings of the Equity Shareholders as well as Secured Creditors were duly convened and held on 20th January 2016. At the said meetings, the proposed Scheme was duly approved unanimously by the Equity Shareholders as well as Secured Creditors present and ca .....

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s of the Chairman, confirming the result of the meetings. 7. Substantive petitions were filed by the Transferor Companies earlier and the same were admitted, vide order dated 21st January 2016. The public notices for the same were duly advertised in the English daily newspaper Indian Express and the Gujarati daily newspaper Sandesh , both Ahmedabad editions, on 11th February 2016. The petition for the Transferee Company was filed after the aforesaid meetings and was admitted on 16th February 201 .....

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ril 2016. 8. Notice of the petition of the Transferor Companies were served upon the Official Liquidator attached to this Court. Vide the reports dated 5th April 2016, filed by the Official Liquidator, it is observed that the affairs of the Transferor company have not been conducted in a manner prejudicial to the interest of their members or to the public interest. However, the Official Liquidator has requested this Court to direct the Transferee Company to preserve the books of accounts and rec .....

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e Scheme is sanctioned, the Transferor company shall comply with all the applicable provisions of law and shall not be absolved from any of its statutory liabilities. 9. Notice of the petitions have been served upon the Central Government and Mr.Kshitij Amin, learned Central Government Standing counsel has appeared for Shri Devang Vyas, learned Assistant Solicitor General on behalf of the Central Government. An affidavit dated 15th April 2016 has been filed by Mr.Shambhu Kumar Agarwal, the Regio .....

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t to the Observation letters from the Bombay Stock Exchange and National Stock Exchange, issued in November 2015, the PetitionerTransferee Company is required to comply with the applicable provisions of the SEBI Circulars. In this regard, it had been submitted that the petitioner Transferee company has already complied with the requisite provisions. Apart from the approval of the Shareholders of the Company at the meeting convened as directed by the Court, the procedure for the requisite approva .....

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uly sanctioned by this Court. In view of the same, it is not necessary to issue any further directions to the Petitioner Companies. 10.2 The observation of the Regional Director vide paragraph2( e) of the affidavit pertains to compliance with FEMA and RBI Guidelines as a very small part of the Equity Share Capital of the Transferee Company is held by FIIs/NRIs. In this regard, it has been submitted that the Transferee Company is not required to obtain any prior approval from the said authorities .....

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ared by a Chartered Accountant. However, the working sheets for calculation of the share exchange ratio have not been submitted by the petitioner companies. In this regard, it is has been submitted that the said issue is beyond the purview of the Regional Director. The regulatory authorities, taking care of the interest of the shareholders like SEBI and the concerned Stock Exchanges have gone through the said report and have not found anything objectionable. The shareholders of the Companies hav .....

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In view of the same, no further documents are required to be placed on record and no further directions are required to be issued to the Petitioner Companies. 10.4 Vide paragraph2( g) of the affidavit, it has been observed by the Regional Director that although two Transferor Companies have Preference Share Capital, separate exchange ratio for preference shareholders has not been disclosed by the petitioner companies, either in the Scheme or vide the Valuation report. It has been submitted that .....

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ders of the respective companies. Keeping this in mind, there is no separate reference to the consideration for the Preference Shareholders, but they are entitled to allotment out of the total number of Equity Shares being issued by the Transferee Company. Hence, pursuant to Clause 10(d) and 10(e), the Preference Shareholders of Savla Enterprise Private Limited and Yash Organochem Private Limited shall be allotted Equity Shares of the Transferee Company along with Equity Shareholders in proporti .....

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s are not under the purview of the Regional Director. The books of the accounts of these companies for last five years have been examined by the Chartered Accountant appointed by the Official Liquidator, who has not raised any such queries. It is submitted that under the applicable provisions of the Act, the Petitioner Companies are not required to give any reasons or explanations for the same. In view of the same, no further directions to the Petitioner Companies are necessary. 10.6 Vide paragr .....

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directions of this Court. A copy of the same is attached herewith for immediate reference as Annexure1. Notwithstanding the said contention, it has been pointed out that Part B of the Scheme of Arrangement contains a categorical statement under the head Rationale and Purpose of the Scheme that there will not be any increase in total promoter holding in Deep Industries Limited pursuant to the scheme . In view of the same, it is submitted that no further directions are necessary for the facts bei .....

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Transferee Company shall do the needful either to transfer the same to it or obtain fresh licences, if so required upon sanction of the Scheme. It is pointed out that the Scheme has envisaged obtaining of such permissions from the regulatory authorities vide clause 19(f) of the Scheme. In view of the same, no further directions are required to be issued to the Petitioner Transferee Company. 10.8 The observation of the Regional Director made vide paragraph2( k) pertains to letter dated 16th Febru .....

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nfirmed that it shall fulfil its statutory liability as and when finally adjudicated. No response has so far been received in the case of the other companies and hence it can be presumed that there are no objections. Further, the petitioner companies agree to comply with the applicable provisions of the Income Tax Act and rules. In view of the same, no further directions are required to be issued to the petitioner companies in this regard. 10.9 The Regional Director has confirmed that no complai .....

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