' NAZIR AHMED SIDDIQUI, J.---Through this petition filed under sections 284 to 288 of the Companies Ordinance, 1984, the petitioners seek to obtain sanction of this Court to a Scheme of Arrangement to merge the entire undertaking of petitioner No,1 (Mahmood Power Generation Ltd; hereinafter to be referred as "MPGL") along with its assets and liabilities into petitioner No,2 (Mahmood Textile Mills Ltd; hereinafter to be referred as "MTML").
2. The petitioner No,1 "MPGL" has an authorized share capital of Rs,150,000,000 divided into 15,00,000 Ordinary shares of Rs,10 each, out of which 7,403,660 Ordinary shares are issued (6,730,600)
Ordinary shares are fully paid in cash and 673,060 Ordinary shares are fully paid bonus shares) and remaining are un-issued. And petitioner No,2 "MTML" holds more than 99% of shares of petitioner No,1 "MPGL"
3. The petitioner No,2 "MTML" has an authorized share capital Rs,150,000,000 divided into 15,00,000 Ordinary shares of Rs,10 each out of which 9,973,989 Ordinary shares are issued (6,288,800 Ordinary shares are fully paid in cash and 3,685,189 Ordinary shares are fully paid bonus shares) and remaining are un-issued.
4. The merger of petitioner No,1 into petitioner No,2 in terms of the scheme attached with this petition as annexure "H" (the Scheme) and annexure "I" (the Statement of Information) is being sought on the ground that the creation of a single unit after merger will not only save administrative/overheads, but also enhance the profit of the unit, improve the operations, manufacturing and production. Moreover, the same will make the credit arrangements even smoother.
5. On the presentation of this petition, the meetings of the members of each of the two petitioners companies were held and as per report of the Chairman presiding the meetings of the petitioners, received in this Court, the proposed merger was unanimously approved. Thereafter, notice of hearing was issued in terms of Rule 61 of the Companies (Court) Rules, 1977. However, except Joint Registrar of Companies, (Securities and Exchange Commission of Pakistan), Multan, no one has come forward to object the proposed scheme of merger. The main objection raised by the said Joint Registrar, is that "the authorized capital of the company can only be increased in terms of sections 92/93 of the Companies Ordinance, 1984 and merger of Authorized Capital of the company which is going to be dissolved with the authorized capital of the company which will survive is beyond the scope of section 287 of the Companies Ordinance, 1984. Moreover, it will cause the loss of revenue of Rs,3,75,000 to the Securities and Exchange Commission of Pakistan" To my humble view this objection is without any substantial force and the same cannot be made applicable to the transfer of authorized capital of petitioner No,1 to petitioner No,2 as undeniably the requisite fee qua the authorized capital of each petitioner company had already been paid.
Hence, this objection is repelled.
6. On a Court-question, the said Joint Registrar admits that merger of petitioner No,1 into petitioner No,2 is not tainted with any malice and the same is being done in good faith.
7. In view of the factors, noted above, I see no hitch to allow the proposed merger in the context of aforesaid scheme (Annexure H and I) of Petitioner No,1 with petitioner No,2 and the same is hereby approved/sanctioned w,e,f, 1-7-2005.
8. Resultantly, petitioner No,1, shall be deemed to have been dissolved and will cease to exist from the said date.