In a case where there is a scheme of arrangement between the wholly owned subsidiary and the holding company, whether the meeting of the shareholders/creditors of the holding company or Transferee Company can be dispensed? – Momagic Technologies Pvt. Ltd. – NCLAT New Delhi
The Adjudicating Authority while considering dispensation of convening, meetings of the shareholders of the Transferor Companies on the ground that consent affidavits of the shareholders have been obtained and placed on record, therefore, it was observed that there is no necessity for convening and holding meetings of the shareholders, accordingly the meetings are dispensed with.
NCLAT considering the submissions of the Appellant that the Appellant Company is a holding company and no new shares are being issued, the rights of the shareholders of the Appellant Company are not affected, the scheme does not involve reorganisation of the share capital and the net-worth of the Appellant Company post amalgamation would remain highly positive. The NCLT erred in not considering the decisions of this Tribunal which forms judicial precedents. NCLAT held that that rejecting the prayer of the of the Appellant is non-est and without application of mind.
