Law: Companies Act, 2017

Section: 279,280,281,282,283,285

Companies Act (XIX of 2017)--- ----Ss. 279, 280, 282, 283 285---Scheme of arrangement---Merger and demergers---Scope---Petitioners requested for Courts approval of a Scheme of Arrangement, which involved specific portions of undertakings of companies Nos. 1 and 2 vesting in company No. 3, while the companies Nos. 1 and 2 would continue to operate as going concerns, as well as company No. 3 with their existing names, without any of them being dissolved---Cumulative effect of this arrangement would be a reduction in shareholders equity of companies Nos. 1 and 2, particularly in their issued and paid-up share capital---Consequently, the shares of company No. 3 would be allotted to those transferring shareholders whose shares in companies Nos. 1 and 2 were cancelled owing to reduction in issued and paid-up share capital---Petitioners had completed all necessary legal formalities, including holding separate meetings of shareholders and creditors and publishing and issuing notices to the Securities and Exchange Commission of Pakistan---As there no obstacles to granting the petition, same is allowed. JUDGMENT MUHAMMAD SHAFI SIDDIQUI, J.---This petition under section 279 read with sections 280 to 283 and 285(8) of Companies Act, 2017 pertains to demerger of specific undertakings of petitioners Nos.1 and 2 in petitioner No.3. The purpose of the petition is approval of the scheme of arrangement dated 23.11.2021 attached as Annexure D to the petition. In substance the petitioners have proposed to restructure in terms whereof specific undertakings of petitioners Nos.1 and 2 i.e. Muhammad Shafi Tanneries (Pvt.) Limited and Shafi Gluco-Chem (Pvt.) Limited i.e. MSTL Demerged Undertaking and SGCL Demerged Undertaking respectively are required to be transferred and vested/amalgamated into petitioner No.3 i.e. Mazhar Shafi Industries (Pvt.) Limited. The subject scheme, which in fact for evolving a Demerged Undertaking, as defined in the scheme, to be carved out from petitioners Nos.1 and 2. The statutory meetings for this Demerging process were also held. 2. On presentation of the petition, in pursuance of orders dated 01.12.2021 notices were issued to SECP and so also…

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