9911796707
TMI Blog2018 (12) TMI 1746X X X X Extracts X X X X X X X X Extracts X X X X ..... style of "Chembra Peak Estates Limited". The Company bears CIN No. U70100KA1970PLC001976. The registered office of the Company is situated at No. 2, 1 st Floor, 5th Main, RMS Layout, Post Office Road, Sanjay Nagar. Bangalore - 560094 B. After incorporation, the Company commenced its business and has been carrying in the same till date. The Company is engaged, inter alia, in the business plantation of coffee, coffee estate and production and supply of Robusta variety etc. C. The authorised share capital of the Company is Rs. 75,00,000/- divided into 6,05,500 equity shares of face value of Rs. 10/- each and 14,450 14% Redeemable Cumulative Preference Shares of face value of Rs. 100/- each. The current paid up share capital of the Company is Rs. 48,44,000/- divided into 4,84,400 fully paid up equity shares of Rs. 10/- each. D. On incorporation, the equity shares of the Company were initially listed on the various stock exchanges viz., Madras Stock Exchange and later to ensure liquidity, were further listed on Bangalore Stock Exchange. Consequent upon both these Stock Exchanges becoming 'De-recognized', the Company was moved to the Dissemination Board of the National Sto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticles of Association of the Company and subject to such approvals, consents, permissions and sanctions, if any, as may be required from any authority, consent of the Shareholders be and is hereby accorded for the consolidation of the entire Authorised, Issues, Subscribed and fully Paid-up Equity Share Capital of the Company by increasing the nominal value of the Equity Shares from Rs. 10/- each to Rs. 60,550/- each so that every lot of 6055 equity shares with nominal value of Rs. 10/- each held by the shareholder(s) are consolidated an re-designated into 1 equity share with nominal value of Rs. 60,550/each provided that no shareholder shall be entitled to a fraction of an equity share and all fractional entitlements resulting from the consolidation shall be aggregated into whole equity shares and the number of whole equity shares so arising shall be held by a trustee appointed by the Board of Directors of the Company who shall dispose off the said whole equity shares and proceeds of sale of such whole equity shares shall be distributed proportionately among the shareholders who would otherwise be entitled to fractionate entitlements. RESOLVED FURTHER THAT the consolidation of E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttern of shareholding on consolidation of shares is as follows: Total paid up share capital (Amt in INR) Nominal value of shares No. of shares The Existing Share capital 48,44,000/- Rs. 10/- per share 4,84,400 equity shares The Post Consolidated Share Capital 48,44,000/- Rs. 60,550/per share 80 equity shares I. By increasing the nominal value of the Equity Shares from Rs. 10/each to Rs. 60,550/- each so that every lot of 6055 equity shares with nominal value of Rs. 10/- each held by the shareholder(s) are consolidated and re-designated into 1 equity share with nominal value of Rs. 60,550/- each provided that no shareholder shall be entitled to a fraction of an equity share and all fractional entitlements resulting from the consolidation shall be aggregated into whole equity shares and the number of whole equity shares so arising shall be held by a trustee, Mr. Sanjay Dave, Independent and Senior Chartered Accountant, appointed by the Board of Directors of the Company who shall dispose off the said whole equity shares and proceeds of sale of such whole equity shares shall be distributed proportionately among the shareholders who would otherwise be entitl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agement of a small number of shares. vi. Share consolidation will reduce the administrative and financial costs connected with a large shareholder base which is in the best interests of the Company, while providing a fair exit to the shareholders of the Company. vii. The plantation industry is facing one of its worst phases wherein the two major cost of inputs, i.e. Labour & Manure, are raising by the year but the realisation is not increasing in same proportion. This has resulted in continuous losses since financial year 20152016 including financial year 2017-18. viii.The Company's income earning asset, the land, itself is under acquisition and the Hon 'ble Kerala High Court has decided that the acquisition is valid, subject to environmental issue. The appeal before larger bench is pending for hearing and the Government seems to be bent upon ensuring that their acquisition is valid. 3. Shri Mahendra Girdharilal, Shareholder of the Company has filed his objections dated 16th October, 2018 to the instant petition averring inter alia as follows: a. The objector, Shri Mahendra Wadhwani is shareholder in the Company, holding 9,515 equity shares of Rs. 10/- each under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f its share from Rs. 10/- to Rs. 60,550/and mandatory exit of minority shareholders by paying out the shareholders out of the Company's own funds. e. The Objector did not tender his 9,515 equity shares of Rs. 10/- each in the exit offer dated 20th February, 2017. The objector did not support the resolutions proposed in the Extra Ordinary General Meeting of the Company that was held on 14th April, 2018. f. The Exit Offer dated 20th February, 2017, by the Promoter Mr. Luxmi Kant Mohta was unreasonable and unfair as the Promoter did not give the right exit price to the public shareholders as the valuation and the process followed was not done in accordance with SEBI Circular dated 10th October, 2016. The present market value of the underlying assets of the Company was not considered for the purpose of valuation of shares. If the value of the underlying assets was considered, the value per share would have been much higher even than the exit price offered by the Promoter. The non-promoter shareholding was being paid Rs. 66 per equity share as share price as per Exit Offer dated 20th February 2017 which was much less than the Fair Market Value (to be determined as per the Exit C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the EGM is not in accordance with Section 102, Companies Act, 2013. The explanatory statement is silent on how the payoff per share has been fixed at Rs. 76 and adopted the figure of Rs. 60,550. The explanatory statement is silent on how the payoff per share has been fixed at Rs. 76/- which is gross undervaluation of the shares of the Company. There is no explanation in the explanatory statement as to how the Company has adopted the figure of Rs. 60,550/- for revising the face value from Rs. 10/-. l. The Company is trying to illegally confiscate the shares of the persons who are diseased without the consent of their legal heirs. The acquisition of shares held by deceased persons by the Promoters is illegal. m. The proposed compulsory and forceful acquisition of shares is in violation of Constitution of India relating to Fundamental Rights. Equity Shareholders have been treated as separate class and such treatment of unequal would offend the doctrine of equality as enshrined in Article 14 of the Constitution. n. The Company has failed to give adequate information and disclosure on number of shares received by the Promoters in the Exit Offer that was purportedly open till ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entioned 7 shareholders objecting to the scheme, 3 of them have already sold their respective equity shares on 18.06.2018. c. Section 61 (1) (b) states that "A limited company having a share capital may, if so authorised by its articles, alter its memorandum in its general meeting to consolidate and divide all or any of its share capital into shares of a larger amount than its existing shares if consolidation is approved, results in changes in voting percentage of shareholders, it is respectfully submitted that this Hon'ble Tribunal may hear the minority shareholders before approval of consolidation of capital and pass such other order or orders as it may deem fit and proper in the circumstances of the case. d. Alternatively, the Company can go for buy back of securities by complying with Section 68 of the Companies Act, 2013, if the intention of the petitioner is to reduce the number of shareholders and for saving cost as stated in the petition/ representation. 5. Heard Shri Parameshwar Bhat, Shri K Dushyantha Kumar, Authorised Representatives for the Petitioner Company and Shri Binoy Chacko, Practicing Company Secretary for the Objector, Shri Mahendra Girdharilal and per ..... X X X X Extracts X X X X X X X X Extracts X X X X
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