SYED HASAN AZHAR RIZVI, J.---Through this petition under section 279 read with sections 280 to 283 and section 285(8) of the Companies Act, 2017, the petitioners which are public companies limited by shares have sought permission of this Court for a Scheme of Arrangement between them more particularly described in the Scheme as set forth in Annexure 'C' to the petition in terms of which specific portions of the undertaking of the petitioner No.1 i.e. the Demerged Undertaking, as more particularly described in the Scheme of Arrangement, will be demerged from the Petitioner No.1 and shall be transferred to, stand vested in and assumed by the Petitioner No.2, while the Continuing Undertaking (as defined in the Scheme of Arrangement) shall continue to remain with the Petitioner No. 1. Upon the Sanction of the Scheme or Arrangement, the Petition ers Nos.1 and 2 will continue as going concerns under their respective existing names and neither shall be dissolved.
2. Pursuant to order dated 12.02.2021 notice of this petition to consider scheme of arrangement proposed between the petitioners in terms of Rule 76 read with Rule 19 of the Companies Ordinance (Court) Rules, 1997 was issued.
Notice was also issued to the Registrar , Joint Stock Companies. Publication was also effected in daily 'Jang' (Urdu) and daily 'The News' (English), Karachi dated 24.02.2021 and so also in the official Gazette of Pakistan dated 28.04.2021.
3. In terms of the order dated 12.02.2021 separate meetings of the members/shareholders of the Petitioners Nos.1 and 2 as well as creditors of the petitioner No.1 were convened on 27.04.2021 as. In the meetings of the Petitioners resolutions as described in Para-3 of all the reports of the Chairman were passed (reports are available from page-35 to 81 and the members of the petitioners voted in favour of their respective resolution thus represented one hundred percent (100%) in value of the shares held by the members present in person or by proxy and voted at the meetings. One hundred percent (100%) of the value of creditors of the Petitioner No.1, present and voting at the meeting of the creditors of the petitioner No., convened and condu cted in accordance with the law and the directions of this Court have consented to and passed the resolution approving the Scheme of Arrangement. Furthermore, no secured creditor of the petitioner No.1 has objected to the Scheme of Arrangement.
4. Parawise comments by the Syed Iftikhar Ul Hasan Naqvi, Additional Registra r of Companies, Securities and Exchange Commission of Pakistan were filed on 28.04.2021, wherein it has been stated that as per subsection (2) of section 779 of the Companies Act, 2017, it is required that a majority in number representing three-fourths in value of the members of the Petitioners, present and voting either in person or, where proxies are allowed, by proxy at the meeting agree to the Scheme of Arrangement. It is further stated in the report that split balance sheet of Petitioner No.1 pre and post-merger reflects Rs.45,099,869 (as non-current asset) Receivable from Demerged Undertaking (ARTS /Petitioner No.2) and (as non-current liability) payable to Continuing Undertaking (ACE/Petitioner No.1), as 'working capital in respect of Demerged Undertaking which has been funded by segment comprising Continuing Undertaking and is to be repaid to Continuing Undertaking'. The nature of this receivable/payable arising as a consequence of instant Scheme needs to be elaborated. It is further stated in the comments of SECP that National Accou ntability Bureau, Sukkur Vide its letter dated 06.09.2017 called certain information from SECP regarding Petitioner No.1 under section 19 of the National Accountability Ordinance, 1999.
The SECP shared the requisite information with NAB as requested. It is also stated in the comments that as per the record there are no registered secured creditors of Petitioner No.2. However , the registered secured creditors of Petitioner No.1 are identified in Annexu re-B enclosed with report. Accordingly , SECP seek direction for the petitioners to solicit no objection certificates (N.O.C.) from their secured creditors.
5. In response to the comments of the Securities and Exchange Commission of Pakistan, comments have been filed on behalf of petitioners whereby the petitioners have denied the objections raised by the SECP and submitted that comments are formal in nature and inconsequential for the purpose of merger and demerger . With regard to split balance sheet of petitioner No. 1 referred to in the comments, it is stated that this a commercial and an accounting matter with respect to the restructuring arrangement, the same has been approved by the shareholders as per of the scheme and as per established case law, no interference is warranted in the corporate and commercial wisdom of the shareholders. With 'regard to the National Accountability Bureau letter , referred to in the comments of SECP , it is submitted that said matter has been disposed of vide order dated 11.05.2018 wherein no order was passed against the petitioner No.1. Learned counsel for the petitioners to support his comments/contentions relied upon the case of Gadoon Textile Mills Limited and 2 others reported in 2015 CLD 2010.
6. In view of the above circumstances, I am of the opinion that all the formalities provided under the law have been completed, therefore, the observations of the SECP are overruled.
7. There is no material on record to suggest that the scheme of arrangement is unjust or unfair or against public interest or in violation of any law. The petition is, therefore, allowed as prayed for and Scheme of Arrangement (Annexure "C" to the Petition) is sanctioned.
The, petition stands disposed of in the foregoing terms.