Law:

Section:

(a) Companies Ordinance (XLVII of 1984)--- ----S. 284---"Mergers" and "acquisitions"---Connotation---Mergers and acquisitions are businesses in which ownership of companies or their operating units are conveyed or conjoined---Such is the amalgamation and integration of two entities into one entity. (b) Companies Ordinance (XLVII of 1984)--- ----S. 284---Demerger---Object and scope---Demerger is a business stratagem in which single business is broken into components; as such it allows a conglomerate to split off its different varieties to invite or prevent acquisition, to raise capital by selling off components that are no longer part of fundamental merchandise line of business or to generate distinct lawful entities to manage diverse managements; it is in fact a method of corporate streamlining and restructuring by dint of which business operations are segregated into one or more components---Demerged company connotes and exemplifies a conglomerate (transferor company) whose undertaking is transferred pursuant to demerger to a resulting company (transferee company). (c) Companies Ordinance (XLVII of 1984)--- ----Ss. 284, 285, 286, 287 & 288---Scheme of amalgamation of companies---Approval of court---Petitioner companies sought approval of court to scheme of arrangement with regards to amalgamation of companies---Validity---Held, it was not function of the court to examine whether there was scope for better scheme---Where court had found that scheme was patently fraudulent, it might not respond or function as mere rubber stamp or post office but could reject scheme of arrangement---Proposed schemes were not found to be violative of any provision of law and/or contrary to public policy but as a whole looked like evenhanded and serviceable from point of view of prudent men of business taking a commercial decision---Once requirements of a scheme for getting sanction of court were found to have been met, court had no further jurisdiction to sit in appeal over commercial wisdom of majority of class of persons who, with their open eyes, had given their approval to scheme---Scheme was approved in circumstances. International Complex Projects Limited and another's…

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