Merger of Orient Refractories and RHI Magnesita was announced in 2018 and should have been done by early 2019 but the scheme was rejected by NCLT in march last year. Companies moved NCLAT on the order from NCLT post covid when the tribunals opened.
The National Company Law Appellate Tribunal (NCLAT) by an order dated January 19, 2021, set aside the order passed by the National Company Law Tribunal, Mumbai Bench (NCLT) dated March 2, 2020 rejecting the scheme of merger of RHI India Private Limited and RHI Clasil Private Limited with Orient Refractories Limited (Collectively referred as “Appellants”).
NCLT found an anomaly in date of approval of the scheme and date of valuation report by chartered accountant and merchant banker as against Appointed Date which is a future date and also raised concern against profit-earning capacity of the Transferor Companies and the valuation done by the valuer. NCLAT in its order has mentioned that NCLT rejected the Scheme of Amalgamation on certain grounds which was not required to be noticed for determination of Amalgamation under section 230-232 of the Companies Act, 2013.
We have discussed in detail the reason for rejection of the scheme of capital reduction by Hon’ble NCLT in our previous article in the month of May 2020.
This article deals with the submissions made by the Appellants i.e. Transferor and Transferee Companies before NCLAT and the reasons stated by NCLAT for setting aside the order passed by the NCLT.
Submission by the Appellants
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