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TMI Blog2017 (10) TMI 1348X X X X Extracts X X X X X X X X Extracts X X X X ..... her order as shall be just and equitable, having regard to the facts and circumstances of this case and thus render justice. 4. It has been stated in the Application that the Applicant Company was incorporated and registered on 04.08.1971 with the office of the Registrar of Companies, Tamilnadu, Chennai as a public limited company by shares. However, subsequently, the office of the Company was shifted after following the procedure prescribed to the jurisdiction of the Registrar of Companies, Tamilnadu, Coimbatore. The Company's Corporate Identity Number (CIN) is U32100TZ1971PLC018202. 5. The main object of the company is to do all kinds of business relating to the manufacture, assembly, fitting up, repairing, converting, overhauling, maintaining rendering services of all and pertaining to telecommunication, electronic, space and satellite communication, apparatus and equipment and railway signalling and safety equipment's, including manufacture of all types of Reeds and Reed Relays. 6. The Authorised Capial of the company is Rs. l,00,00,000 (Rupees Five Crore Only) divided into 50,00,000 (Rupees Fifty Lakhs Only) equity shares of Rs. 10 each. The issue, subscribed and paid up ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xit Circular, the companies that are exclusively listed on the de-recognised RSEs, were required to seek listing on other exchanges or provide exit opportunity to its non-promoter shareholders and subsequently, the SEBI has issued another circular on 30.05.2012 ("2nd Exit Circular"). In the said Circular, the process of the de-recognition of stock exchanges was listed out which provided that the exclusively listed companies which fail to obtain listing on any other stock exchange will cease to be a listed company and will be moved to dissemination board of one of the stock exchanges having nationwide trading terminal, by the existing stock exchange. 11. Thereafter, the SEBI also issued another circular dated 22.05.2014 ("3rd Exit Circular") giving directions to the Regional Stock Exchanges for providing an option to companies exclusively listed on RSE's either to get themselves listed on a stock exchange with nationwide trading terminal, or voluntary delisted of their securities under the SEBI (Delisting Equity Shares) Regulations, 2009. Not only this, another circular was issued by the SEBI on 17.04.2015 ("4th Exit Circular") under which time was extended for such companies by an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 13.11.2016 to 12.12.2016 came to be 89.56% in favour of the Resolution in reduction of share capital. It has also been mentioned that the reduction of share capital does not involve extinction or reduction of liability in respect of the unpaid share capital or cancellation of paid up share capital which is lost or and unrepresented by available assets. Thus, the reduction also involves the reduction of the securities premium account of the company, which is also considered to be reduction of share capital within the meaning of the provisions of the Companies Act, 2013. 13. In this case, Mr. Dilip Kumar Surana, being a shareholder, along with four other shareholders, have filed the objections stating therein that the SEBI circular dated 10.10.2016 prescribed the procedures for giving exit opportunity to the public shareholders of the exclusively listed companies of De-recognised/Non-operational/Existed Stock Exchanges placed in the Dissemination Board and the Applicant Company did not give such an exit opportunity as per the said circular. It has further been stated that the Net Asset Value and Discounted Cash Flow methods were employed to arrive at the value of shares and the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the shares given by the Valuers is not correct. The value per share would have been more than that which has been shown as Rs. 107/- per share. 16. In this connection, we may make a reference to the ruling of the Hon'ble Apex Court given in G.L. Sultania v. SEBI [2007] 76 SCL 473, wherein the Court has observed as follows :- "It appears to us that the appellant expects this court to act as an expert itself. This, we are forbidden from doing. Unless it is shown that some well-accepted principle of valuation has been departed from without any reason, or that the approach adopted is patently erroneous or that relevant factors have not been considered by the valuer or that the valuation was made on fundamentally erroneous basis or that the valuer adopted a demonstrably wrong approach or a fundamental error going to the root of the matter this Court would not interfere with the valuation of an expert. As noticed in Miheer H. Mafatala v. Mafatlal Industries Ltd. [1997] 1 SCC 579, valuation of shares is a technical and complex problem which can be appropriately left to the consideration of experts in the field of accountancy. So many imponderables enter into the exercise of valuation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no objection from any of the unsecured creditors. The explanatory statement under Section 102 of the Companies Act, 2013 is also on record. Section 66 of the Companies Act, 2013 does not make any distinction between the number of public and promoter shareholders who have cast their votes for and against the Resolution. It has also been submitted that Discounted Free Cash Flow method is one of the recognised fair value method which is in consonance with the International Financial Reporting Standards (IFRS), which the Ministry of Corporate Affairs also acknowledged through a Press Release dated 13.03.2015 that "the Indian Accounting Standards significantly follow the International Financial Reporting Standards (IFRS)". However, any method of fair valuation can be used as long as there is no inherent defect in the mode of valuation. It has also been submitted that the question of reduction of share capital is treated as a matter of domestic concern, and it is the decision of the majority which prevails as has been held by Hon'ble High Court of Delhi in Reckitt Benckiser (India) Ltd. MANU/DE/1174/2005. 21. It has specifically been mentioned by the Applicant Company that the proce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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