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TMI Blog2017 (6) TMI 1409X X X X Extracts X X X X X X X X Extracts X X X X ..... anies states that the Transferee Company is a television broadcasting company running general entertainment (non-news/current affairs) television channels. The Transferor Company is also a television broadcasting company running general entertainment (non-news/current affairs) television channels. 4. The proposed Scheme will have the following advantages: It is strategically appropriate that all the television channels are housed and function from a single legal entity which has more number of channels and hence better customer connect and vendor relationship. The consolidation of the business operations into a single entity will lead to consolidation of various television related intellectual property rights and other properties in the larger entity i.e. the Transferee Company and create synergies of operations thereby enabling the Transferee Company to participate more profitably in an increasingly competitive market. The synergies created by the consolidation would increase operational and management efficiency and integrate business functions and decrease cost of legal compliance with respect to the transferred businesses. Right sizing balance sheet of the Transferee Company b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n-resident shareholders (holding 100% shares) in the Transferor Company. No notice has been served to RBI. Company in its reply in point No. 1(xiii) B has inter mentioned that the entire equity shares & preference shares held by the Walt Disney Company (Southeast Asia) Pie. Limited is proposed to be transferred to Disney Entertainment India Limited subject to requisite RBI approval. In this regard, the Petitioner has to produce the acknowledgement copy of sending notice to the RBI 3. ROC vide report/letter No. ROC/JTA(C)/170405/230 TO 232/675 dated 22.02.2017, has inter alia mentioned that as per MCA Master data the Paid up capital of the Transferor Company and the authorized and paid up capital of the Transferee Company do not tally with the Scheme/Petition. In this regard the Petitioner has to clarify for the difference. 4. Company in the reply at point 1(13) under heading preference shareholders in B inter alia mentioned pre and post scheme share capital and non-resident holding in the Transferee Company. Under the heading post scheme it is mentioned the details based on assumption that Transfer of shares held by TWDC (SEA) in favour of Disney Entertainment (India) Lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n direct investment is permitted in the Transferor Company and the Transferee Company. Therefore, no prior approval of the RBI is required. The Learned Counsel for the Petitioners submits that the transfer of shareholding in the Transferor Company is an inter-group transfer from The Walt Disney Company (South East Asia) Pte. Ltd. to Disney Entertainment (India) Ltd. and is independent of the transaction under the Scheme. This being said, in response to an application filed with the Reserve Bank of India for approval to the transfer of shares, the Reserve Bank of India has issued its letter dated 27th March 2017 directing that the transfer can be undertaken in accordance with provisions of paragraph 2 of Schedule 1 of Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations 2000 as amended from time to time read with the Notification No. FEMA 315/2014-RB dated 10th July 2014 in this regard. 11. As far as the observations made in paragraph IV(3) of the report of the Regional Director is concerned the share capital details of the Transferor Company in the MCA Master data and as mentioned in the Scheme/Petition are the same and correct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s governed by Section 52 of the Companies Act, 2013 read with the erstwhile provisions of Section 100 of the Companies Act 1956. The Transferee Company has complied with all requirements of the provisions of Section 52 of the Companies Act 2013 read with the erstwhile provisions of Section 100 to 102 of the Companies Act 1956 existing at the time of filing of the above Petitions in relation to the adjustment to the securities premium as contemplated in the Scheme. The said explanation is found to be satisfactory. 14. As far as the observations made in paragraph IV(6) of the report of the Regional Director is concerned, the fair value of shares of the Transferee Company being issued in excess of the face value of such shares will be credited to the securities premium account. The Learned Counsel for the Petitioners submits that the same is in accordance with Section 52 of the Companies Act 2013. Further the same is also covered in auditor's certificate furnished by the Transferee Company and annexed at Annexure 'F' to the report of the Regional Director certifying that the accounting treatment is in accordance with AS-14 applicable to the Transferee Company as on the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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