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2002 DIGILAW 189 (GUJ)

ICICI LIMITED v. STATE

2002-03-07

M.S.SHAH

body2002
M. S. SHAH, J. ( 1 ) THIS is a petition filed by ICICI Bank Limited under Sections 391 to 394 of the Companies Act, 1956 to obtain sanction of this Court to the arrangement embodied in the Scheme of Amalgamation of ICICI Limited (hereinafter referred to as `icici), ICICI Capital Services Limited (hereinafter referred as "icici Capital") and ICICI Personal Financial Services Limited (hereinafter referred to as "icici PFS") [all the three Companies are hereinafter collectively referred as the "transferor Companies"] with ICICI Bank Limited (hereinafter referred to as "icici Bank" or "the Transferee Company" or "the petitioner-Company" ). ( 2 ) AS the name itself suggests, the petitioner-Company is a banking Company, a private sector commercial bank. ICICI Bank, an affiliate Company of ICICI, offers products and services which largely complement the products and services offered by ICICI and other Transferor Companies. The ICICI group, which comprises ICICI, its subsidiaries and other affiliate Companies, is a diversified financial services group. ICICI was formed in 1955 at the initiative of the World Bank, the Government of India and representatives of Indian industry. It was created to develop a financial institution for providing medium term and long term project financing to Indian businesses. With liberalization of the financial sector in India from 1991 onwards, ICICI diversified in financial services. Particulars about the activities ICICI and the other Transferor Companies are given in para 16 of the petition. ICICI Bank is a wholly owned subsidiary of ICICI. In conformity with the directives of the Reserve Bank of India, ICICI had reduced its shareholding in ICICI Bank to approximately 46% of the equity share capital. In view of the benefits of transformation into a bank and the Reserve Bank of Indias pronouncements on universal banking, ICICI explored various corporate structuring alternatives for its transformation into a universal bank. ICICI Bank also identified a large capital base and size and scale of operations as key success factors in the Indian banking industry and, therefore, ICICI and ICICI bank decided to go in for amalgamation of the two entities in view of ICICIs significant shareholding in ICICI Bank and the existing strong business synergies between the two entities. As a part of this amalgamation, ICICI Capital and ICICI PFS were also decided to be amalgamated with ICICI Bank. As a part of this amalgamation, ICICI Capital and ICICI PFS were also decided to be amalgamated with ICICI Bank. ( 3 ) ICICI appointed JM Morgan Stanley Private Limited and ICICI Bank appointed DSP Merrill Lynch Limited as their advisors to undertake valuation of the shares of the Companies and recommend a share exchange ratio to the Board of Directors of each Company. The advisors recommended the share exchange ratio that against 2 ICICI shares, one share of ICICI Bank be issued. The Board of Directors of the Transferor Companies and of the Transferee Company approved the scheme of amalgamation on 25. 10. 2001. ICICI Bank having its Registered Office in Baroda within the territorial jurisdiction of this Court preferred Company Application No. 360 of 2001. By order dated 19. 12. 2001, the Court directed ICICI Bank to convene the meeting of the equity shareholders with an observation that since the amalgamation was not to affect the interest of the creditors of the petitioner-Company, no meeting of the creditors was required to be called for. ICICI Bank sent notices alongwith the scheme, explanatory statement, proxy and information statement to the equity shareholders and ADR holders for the meeting convened on 25. 1. 2002. The advertisement of the notice for convening the meeting was also published in "business Standard" and "sandesh" on 1. 1. 2002. As scheduled, the meeting of the equity shareholders was held at Baroda on 25. 1. 2002. As per the report dated 29. 1. 2002 of the Chairman appointed for the meeting, the equity shareholders representing 96. 60% in number of equity shareholders and 99. 49% in value sanctioned the scheme of amalgamation. The present petition thereupon came to be filed on 30. 1. 2002 by ICICI Bank for obtaining sanction to the scheme of amalgamation. ( 4 ) ON 31. 1. 2002, this Court admitted the petition and directed the notice of hearing to be advertised. Accordingly, the notice of hearing of this petition has been advertised in "business Standard" and "sandesh" on 4. 2. 2002 as stated in the affidavit dated 19. 2. 2002 of Mr Anil C Dave. The petitioner-Company also sent individual notices to the equity shareholders and ADR holders regarding the hearing of this petition. Accordingly, the notice of hearing of this petition has been advertised in "business Standard" and "sandesh" on 4. 2. 2002 as stated in the affidavit dated 19. 2. 2002 of Mr Anil C Dave. The petitioner-Company also sent individual notices to the equity shareholders and ADR holders regarding the hearing of this petition. ( 5 ) IN response to the aforesaid notices, the responses/objections were received from the following persons :- ( 21 ) IN the result, the Scheme of Amalgamation of ICICI Limited, ICICI Capital Services Limited, and ICICI Personal Financial Services Limited (three "transferor Companies") with ICICI Bank Limited (the Transferee Company) is sanctioned and the prayers in terms of 30 (a) to (f) are hereby granted. ( 22 ) THE petitioner Company shall pay the fees of the learned Additional Standing Counsel for the Central Government which are quantified at Rs. 3,500. 00 within one month from today. ( 23 ) THE petition accordingly stands disposed of. ( 24 ) IN view of the above order, Civil Application No. 24 of 2002 does not survive and is accordingly disposed of. .