Law: Companies Ordinance, 1984

Section: 284, 285, 286, 287 & 288

(a) Companies Ordinance (XLVII of 1984)---Ss. 284, 285, 286, 287 & 288---Petition seeking sanction of the scheme of arrangement providing for amalgamation of two Companies with usual transfer of whole of the undertaking, business, assets, properties, rights, liabilities and obligations and consequential prayers was contested by minority shareholders of both the companies and arrangement was declined by the Court with directions that exercise of valuation be conducted afresh through an independent auditor, who should evaluate the companies as ongoing concern and for the purpose of valuation the factors such as tangible and intangible assets and every factor that concerns the valuation be taken into consideration---Objectors had attacked the valuation report of the auditors and contended that the report did not comply with the Court order as the ' auditors had not valued the company as an ongoing concern, and not taken factors into consideration provided in the order of the Court---Companies objected to the maintainability of the application of the objectors on the grounds, that order directing fresh valuation did not provide for filing objection to the valuation report of the auditors and on pronouncement of the Court had become functus officio and that application of objectors was based upon mala fide---Validity---Held, when the Court in its order required anything to be done providing parameters, a party to the proceedings was always entitled to agitate that the thing done was not consistent with the Court order and may seek its compliance in its true terms and spirit---This was so because the thing done under the Court order remained justiciable until the same reached its logical conclusion of either being accepted by the parties or operated as an acceptance by law---Auditors had followed the formula of dividend growth model whereby per share value had been advised to be reasonable price of the company at which the majority might require from the minority share-holders--Grievance of the objectors was that the value of their shares may be derived on dividend growth model by excluding the right shares issued to the parent company which exercise, probably,…