The national appellate tribunal has approved the proposed merger between digital cinema distribution firm UFO Moviez India and digital cinema technology provider Qube Cinemas Technologies, but the nod came too late as the deal has been called off after missing the deadline.
A division bench of the National Company Law Appellate Tribunal (NCLAT) has set aside an order of the National Company Law Tribunal (NCLT) rejecting the scheme of merger.
The Mumbai bench of NCLT had in January rejected the merger citing that the whole scheme appeared to be framed for evading duly payable stamp duty and to deny shareholders at various levels their legitimate right of proper valuation of the intrinsic share value along with goodwill.
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The companies had challenged the move in the appellate tribunal.
A division bench of NCLAT comprising Justices SJ Mukhopadhaya, Venugopal and Jarat Kumar Jain, in its order last week, observed that the ground given for rejection were uncalled for and the tribunal was only required to notice all the requirements of Sections 230-232 of Companies Act.
“The tribunal was also required to follow the accounting standard for the treatment of shareholders,” it said. “However, it is expected that such issue was not raised and were not discussed by NCLT.”
The multi-layered deal involves the merger of UFO and its wholly owned subsidiary PJSA Technosoft with Qube Cinema and its group companies Qube Digital Cinema and Moviebuff.
UFO Moviez had announced the merger in November 2017 with an aim to be the leader in India’s digital cinema distribution and in-cinema advertising space.
Source: Economic Times