1. ' This is a joint petition for merger by petitioners Nos.1 and 2, who are dealing in the investment in terms of Order 284 to 287 read with section 503 of the Companies Ordinance, 1984. Under the scheme of merger (Annexure-A) the petitioner No,2 to the merged together with all the rights, contracts, assets, liabilities and obligations of every description in accordance with the terms of the scheme with petitioner No,
1. Both petitioners' firm, inter alia, transact the business of investments in assets and securities so as to provide a vehicle for the investors to invest their funds in securities under the directions of its Investment Adviser. The petitioners are incorporated under the Companies Ordinance and are public listed Companies with Karachi Stock Exchange. The authorized share capital and paid-up capital shares of the petitioners are detailed in paras. 5-A and 5-B of the petition. Both petitioners are engaged in the same line of business and also associated Company under the common management and the common Directorships with bulk of shareholdings being common. The Registered Offices of both the petitioners are also now located in the same building from where the operations, affairs and businesses are being controlled by the respective Boards of Directors and Officers. The controlling shares of the petitioner No,1 and the petitioner No,2 are held by the same Group and it would be convenient to carry on under one management and under one Board of Directors to minimize the costs including legal, administrative, secretarial and other expenses and also facilitate the maintenance of accounts and records.
2. ' The scheme has been approved by the Securities and Exchange Commission of Pakistan (Annexure-B). The Board of Directors of both the petitioners have passed the resolution (Annexures C and C/1). The petitioners also obtained direction from this Court for extraordinary general body meeting of the members of the petitioners in accordance with the provision of sections 284(1) and 287 of the Companies Ordinance read with rule 953 of the Sindh Chief Court (O.S.) Rules and rule 55 of the Companies (Court) Rules, 1997. Such extraordinary general meetings were convened on 26-1-2002 by the respective petitioners. The report of the Chairman of the petitioner No,1 and petitioner No,2 supported by affidavit regarding convening of the meeting and passing of the resolution by the members of the respective petitioners on 12-4-2002 with notice to the members alongwith statement of information required under section 160(1)(b) read with section 286 of the Companies Ordinance in respect of the petitioner No,1, 39 members in person and by proxy were present, comprising of 80.85% representative of the members approved the scheme of amalgamation by 100% through resolution in the following terms:-- "Resolved that the 'scheme of arrangement for amalgamation between BSIS. Balanced Fund Limited and Security Stock Fund Limited, as tabled at this meeting and initialed by the Chairman for the purposes of identification be and is hereby approved agreed and adopted.
3. ' Resolved further that the Chairman of this meeting Mr. Abid Hussain Zuberi and Mr. Abdul Hamid Dagia, the Director of the Company be and are hereby jointly and severally authorized to make formal amendments to the Scheme, if recommended or directed by the Hon'ble High Court of Sindh or by any other lawful authority for giving proper legal compliance and implementation and to fullfil all legal, procedural and corporate formalities for getting the Scheme sanctioned by the Hon'ble High Court of Sindh and for its implementation."
4. ' The extraordinary general meeting of the members of the petitioner No,2 was also held under the Chairman on the same day viz. 12-4-2002 in all 121 members in person and proxies were present, representing 68.39% and approved the scheme by 100% in following terms:-- "Resolved that the "scheme of arrangement for amalgamation between BSJS Balanced Fund Limited and Security Stock Fund Limited, as tabled at this meeting and initialed by the Chairman for the purposes of identification be and is hereby approved, agreed and adopted.
5. ' Resolved further that the Chairman of this meeting Mr. Munaf Ibrahim and Mr. Abid Hussain Zuberi, the Director of the Company be and are hereby jointly and severally authorized to make formal amendments to the Scheme, if recommended or directed by the Hon'ble High Court of Sindh or by any other lawful authority for giving proper legal compliance and implementation and to fulfil all legal, procedural and corporate formalities for getting the scheme sanctioned by the Hon'ble High Court of Sindh and for its implementation."
6. The object of the amalgamation is to achieve the economy of scales and to carry on the business more economically and efficiently to streamline and maintain smooth and efficient management and corporate control to cut unnecessary administrative secretarial and other expenses to attain the main objectives of both the petitioners-Companies more feasibly to avoid duplication of the managerial and corporate process and to otherwise carry on the business more conveniently and advantageously and in order to achieve the object the scheme (Annexure-A) was prepared which was approved and sanctioned by the Board of Directors under the scheme comprising inter alia all its properties assets, rights, contracts, liabilities and obligations etc. Shall stand transferred into and be vested in and merged with petitioner No, 1.
7. There is no objection from any quarter to the scheme. The Registrar, Joint Stock Companies through their comments has not commented adversely. The Security and Exchange Commissioner of Pakistan has already approved the scheme subject to the sanction by this Court. The merger is based on ground realities, it will not affect he interest of the members and the same is not against the public interest. Therefore. The merger is allowed by following order:--
(1) An order under section 284(2) of the Companies Ordinance 1984, sanctioning the scheme of arrangement as set forth in Annexure -A' hereto so as to make the Scheme binding upon the petitioner No,1 and its Members and the petitioner No,2 and its Members.
(2) The following orders so as to take effect at the same time as the order sanctioning the Scheme of arrangement takes effect in accordance with section 284(3) of the Companies Ordinance, 1984, namely:--
(i) An order under section 287(1)(a) of the Companies Ordinance, 1984 transferring to and vesting in the petitioner No,1 the whole undertaking of the petitioner No,2, including all its properties, assets, rights, liabilities and obligations of every description as described in the said Scheme of arrangement, as set forth in Annexure -A' hereto.
(ii) An order under section 287(1)(b) of the Companies Ordinance, 1984 directing the petitioner No,1 to allot and issue 9,000,000 (Nine Million) Ordinary Shares of the nominal value of Rs, 10 each, credited as fully paid-up in the books of the petitioner No,1 to the registered shareholders of the petitioner No,2 in ratio of 9:10 i,e, in respect of every ten (10) shares of the petitioner No,2, Company there should be issued nine (9) shares of the petitioner No,1 Company in proportion to their present respective shareholdings in the petitioner No,2 and further directing that for the determination of the Members of the petitioner No,2 to such ordinary shares of the petitioner No,2 Company the treatment of the fractional entitlement and the allotment of such shares and delivery of share certificates shall be in accordance with the scheme of arrangement as set forth in Annexure A hereto and for that purpose, the Register of Members of the petitioner No,1 shall be closed for a period of seven days prior to and inclusive of the date fixed by the Directors of the petitioner No,2 by reference to which the registered shareholders of the petitioner No,2 are to be determined for entitlement of the ordinary shares of the petitioner No, 1.
(b) And that in case of Book Entry Securities, as defined under the Central Depositories Act, 1997 (CD Act) and the Central Depository Company of Pakistan Limited Regulations (CDC Regulations).
8. The shares of the petitioner No,2 be cancelled and in lien thereof Book Entry Securities of the petitioner No,1 Company be issued to the existing shareholders of the petitioner No,2 in the above ratio in accordance with the procedures prescribed under the CDC Regulations.
(3) An order under section 287(1)(c) of the Companies Ordinance, 1984 directing that all the legal proceedings instituted by or against the petitioner No,2, which may be pending shall be continued by or against the petitioner No,2.
(4) An order under section 287(1)(d) of the Companies Ordinance, 1984 declaring the dissolution without winding-up of the petitioner No,2 so as to take effect from the date on which the ordinary shares of the petitioner No,1 are fully issued to the holders of the shares of the petitioner No,2 in accordance with the Scheme in Annexure 'A' hereto.
9. The petition is disposed of in above terms, however, IC with no order as to costs.