A Scheme of amalgamation was filed by Antelope Mercantile Pvt. Ltd. & Ors.[1] (‘the Petitioner’) for approval from the NCLT Mumbai bench under sections 230 to 232 of the Companies Act 2013
- The scheme of amalgamation proposed merger of ten companies into a single transferee company. All these companies were held by the same shareholder group.
- The companies involved in the proposed scheme of amalgamation had a significantly negative net worth, which was a major concern highlighted by the Regional Director and Official Liquidator.
- Despite the creditors’ consents obtained for the scheme, the tribunal noted potential risks to creditor protection due to the negative financial position of the companies.
- The companies were engaged in related party transactions that were scrutinized for their impact on financial fairness and transparency.
- The tribunal identified that the companies were classified as deemed Non-Banking Financial Companies (NBFCs), which added regulatory and compliance complexities affecting the scheme’s viability.
- Financial viability of the merged entity was doubted as the scheme did not convincingly demonstrate how the new structure would improve financial health.
- The procedural compliance with company law and the scheme sanctioning norms was satisfied, but the substantive commercial rationale behind the amalgamation was questioned.
- The tribunal emphasized the necessity for schemes to be just, fair, reasonable, and in public interest beyond mere procedural correctness.
- The overall evidence pointed to a scheme designed more for achieving compliance cost savings than ensuring robust financial and regulatory health, leading to the rejection of the scheme by the NCLT.
These factual findings were supported by the financial statements showing negative net worth, documented creditor consents, the nature of observed related party transactions, the classification as NBFCs, and the detailed submissions made by the Regional Director and Official Liquidator raising concerns about financial viability and public interest.
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[1] Antelope Mercantile Pvt. Ltd. & Ors. [LSI-1305-NCLT-2025-(MUM)] order dated September 09, 2025