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rchgiri

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Dear Friends,

This article is specially dedicated to the "CS Professional Old Syllabus CRI Questions & Answers >> Correct or Incorrect".

I hope and wish it will be useful to all the readers.



Last edited by rchgiri on Fri 1 Nov 2013 - 16:49; edited 2 times in total

rchgiri

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CSoC King
CSoC King
Source: ICSI Guideline Answers

State, with reasons in brief, whether the following statements are correct or
incorrect:

(i) A decree-holder unsecured creditor is NOT a separate class.

(ii) If a scheme of arrangement is rejected by secured creditors, then it is deemed to be rejected by all the creditors.

(iii) The workers have the right to oppose the scheme of arrangement when the same affects the right of employees prejudicially.

(iv) In the scheme of amalgamation, the transferor company is supposed to be dissolved without winding-up.

(v) In all the schemes of arrangement, a clearance of the Competition Commission of India is must.



Last edited by rchgiri on Fri 19 Oct 2012 - 20:14; edited 1 time in total

rchgiri

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CSoC King
CSoC King

Answers to the posting:

(i) Correct

(ii) Correct

(iii) Correct

(iv) Correct

(v) Correct

rchgiri

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CSoC King
CSoC King
State, briefly citing relevant provisions of the law, whether the following statements are correct or incorrect :

(i) In case of transfer/sale of undertaking, compliance of section 293(1)(a) is NOT required.

(ii) Separate petition for amalgamation is NOT required to be filed by the transferee company even when the transferor company (100% subsidiary of transferee company) has already filed the petition.

(iii) SEBI Takeover Code 2011 is not applicable to any arrangement or reconstruction including amalgamation or merger or demerger under any Indian/foreign law or regulation.

(iv) The court has power to order winding-up of a company while considering its scheme of arrangement.

(v) Buy-back under section 77A of Companies Act, 1956 cannot be
applied to a scheme under section 100 to 104 and section 391 as the two operate separately.

(vi) Unsecured creditors who may have filed suits or obtained decrees shall be
deemed to be of the same class as of other unsecured creditors.

(vii) Debenture holders do not enjoy different position as compared to secured creditors in a scheme of amalgamation.



Last edited by rchgiri on Fri 19 Oct 2012 - 22:46; edited 1 time in total

rchgiri

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CSoC King
CSoC King
Answers to the posting:

(i) Correct

(ii) Correct

(iii) Correct

(iv) Correct

(v) Correct

(vii) Correct

rchgiri

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CSoC King
State whether the following statements are correct or incorrect.

(i) The expression ‘reconstruction’ has been used in section 394 of the Companies Act, 1956 alongwith the term amalgamation though it has not been defined therein.

(ii) Accounting Standard-14, issued by the ICAI, classifies mergers into two categories, amalgamations in the nature of mergers and amalgamations in the nature of purchase.

(iii) Stamp duty is NOT payable on an order issued by the Board for Industrial and Financial Reconstruction (BIFR).

(iv) There is no need for a notice to be given to the Central Government once again, when court proceeds to pass final order to dissolve the transferor company.



Last edited by rchgiri on Fri 19 Oct 2012 - 20:13; edited 2 times in total

rchgiri

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CSoC King
CSoC King
Answers to the posting:

(i) Correct

(ii) Correct

(iii) Correct

(iv) Correct

rchgiri

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CSoC King
CSoC King
State whether the following statements are correct or incorrect.

(i) The scheme of arrangement under section 391 must be approved by a majority of members representing three-fourths in value of the creditors or class of creditors or members or class of members as the case may be present and voting either in person or by proxy. The extract of such resolution passed under section 391 of the Act, pursuant to the direction of the Court, need not be filed with the Registrar of Companies.

(ii) Where a company obtains 90% of the shares and class shares under a scheme of arrangement, it can compel the dissentient minority to part with its shares.

(iii) A copy of the order of the High Court under section 391 will have to be
annexed to every copy of the memorandum of association of the company AFTER a certified copy of the order has been filed with Registrar of Companies.

(iv) A scheme of compromise or arrangement in case of government company has to be sanctioned by the Central Government instead of by the High Court.

(v) An order of the High Court sanctioning a scheme of amalgamation is liable to stamp duty at the rate prescribed under the Indian Stamp Act, 1899 ONLY in those states where the states stamp law provides.



Last edited by rchgiri on Fri 19 Oct 2012 - 20:12; edited 1 time in total

rchgiri

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CSoC King
CSoC King
Answers to the posting:

(i) Correct

(ii) Correct

(iii) Correct

(iv) Correct

(v) Correct

rchgiri

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CSoC King
CSoC King
State whether the following statements are correct or incorrect.

(i) Section 395 gives mandate for a compulsory acquisition mode for the transferee company to acquire the shares of minority shareholders of transferor company holding less than 5% of the share capital even if such minority shareholders do not consent to the scheme.

(ii) Buy-back of equity share capital in any financial year should not exceed 25% of its total paid-up equity capital in that financial year.

(iii) Amalgamation of a foreign company with an Indian company is possible under the Companies Act, 1956.

(iv) SEBI Takeover Code is not applicable to any arrangement or reconstruction including amalgamation or merger or demerger under any law or regulation, Indian or foreign.

(v) Company can buy-back shares purely for equity restructuring and not for
making profits by buying and selling its own shares.

(vi) There is no transfer when the assets of the transferor company pass to the transferee company.

(vii) Implications of the term ‘unsecured creditors who may have filed suits or obtained decrees shall be deemed to be of the same class as other unsecured creditors’.

(viii) Court CAN withhold the sanction of scheme of compromise or arrangement.

rchgiri

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CSoC King
CSoC King


Answers to the posting:

(i) Correct

(ii) Correct

(iii) Correct

(iv) Correct

(v) Correct

(vii) Correct

rchgiri

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CSoC King
CSoC King
State whether the following statements are correct or incorrect.

(i) Appeal CAN be made to a superior court against orders under Sections 391 / 394.

(ii) SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 is applicable even if the acquirer is a person resident outside India.

(iii) A company CANNOT buy-back more than 25% of its paid-up equity capital in a single year under section 77A.

(iv) Section 396 contemplates a situation where a merger can take place without the court's intervention.

rchgiri

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CSoC King
CSoC King
Answers to the posting:

(i) Correct

(ii) Correct

(iii) Correct

(iv) Correct

Soundharya


CSoC Master
CSoC Master
"Thanks" is just not the word to this post sir !

These answers really helps.

Great going..

https://sounds-takeonit.blogspot.com

rchgiri

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CSoC King
CSoC King

Thank you for such a BIG compliment.

Happy reading and happy learning.

mione

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CSoC Master
CSoC Master
thanx for posting

rchgiri

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CSoC King
CSoC King
These questions are also asked in CS Professional P1, P2, P7 & P8.

rchgiri

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CSoC King
CSoC King
State whether the following statements are correct or incorrect citing relevant provisions of the law :

(i) The scheme of amalgamation is approved by shareholders holding more than 75% of the shares who vote at the meeting of the members of the company convened under the orders of the court.

(ii) Application for approval of scheme of compromise or arrangement can be made by a creditor of the company.

(iii) Proxies cannot be counted for the purpose of quorum at the general meeting convened in accordance with the directions of the court.

(iv) Copies of the order of the High Court sanctioning the scheme of arrangement are required to be affixed to all copies of memorandum of association and articles of association of the transferee company.

(v) Section 394 contains reference to reconstruction of any company or companies or amalgamation of any two or more companies.

(vi) Accounting Standard-14 is equally applicable whether it is a case of amalgamation or demerger.



Last edited by rchgiri on Tue 22 Oct 2013 - 19:09; edited 2 times in total

rchgiri

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CSoC King
CSoC King
Answers to the posting:

(i) Incorrect

(ii) Correct

(iii) Incorrect

(iv) Correct

(v) Correct

(vi) Incorrect

rchgiri

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CSoC King
CSoC King
State whether the following statements are correct or incorrect citing relevant provisions of the law/case law:

(i) Where the non-banking financial company is proposed to be amalgamated with the banking company, the banking company should obtain approval of the Reserve Bank of India before the scheme of amalgamation is approved by the Board.

(ii) A scheme of amalgamation and arrangement under sections 391-394 has been unanimously passed by shareholders and secured creditors having 70% value of their shares and debts respectively. The company argued before the court that requisite approvals have been obtained and the majority of shareholders and secured creditors have sanctioned the scheme.

(iii) The amalgamated company has to issue new shares to non-resident Indians on amalgamation and for that it has to obtain permission of the Reserve Bank of India under the provisions of the Foreign Exchange Management Act, 1999.

(iv) In amalgamation of companies, both the transferor and transferee need to be companies capable of being wound-up under the Companies Act, 1956.

(v) In merger and amalgamation, dissolution without winding-up takes effect upon issue of order by the High Court.



Last edited by rchgiri on Tue 22 Oct 2013 - 20:21; edited 1 time in total

rchgiri

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CSoC King
CSoC King
Answers to the above question:

(i) Incorrect (SEBI --> RBI --> High Court)

(ii) Incorrect

(iii) Correct

(iv) Incorrect

(v) Correct

rchgiri

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CSoC King
CSoC King
State whether the following statements are correct or incorrect.

(i) Court cannot refuse to sanction a scheme of arrangement which has been approved by majority of shareholders/creditors of the companies concerned.

(ii) Court would not insist on prior approval of stock exchange(s) while sanctioning a scheme of arrangement.

(iii) The word ‘amalgamation’ or ‘merger’ is not defined anywhere in the Companies Act, 1956.

(iv) The SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 also apply to acquisition of global depository receipts (GDRs) or American depository receipts (ADRs).

(v) Filing of draft letter of offer with SEBI should be deemed or construed as conclusive evidence that the same has been vetted or approved by SEBI.

(vi) An offer made by the acquirer can be withdrawn unconditionally at any time without any demur or resistance of any party since the acquirer is at liberty to withdraw his offer.

(vii) The order of court sanctioning the scheme of arrangement is final and effective. Companies need not do any thing thereafter in respect of courts sanction.

rchgiri

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CSoC King
CSoC King
Answers to the above posting:

(i) Correct

(ii) Correct

(iii) Correct

(iv) Partially Correct

(v) Incorrect

(vi) Incorrect

(vii) Incorrect

rchgiri

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CSoC King
CSoC King
State whether the following statements are correct or incorrect.

(i) There is a bar on a company amalgamating with a newly incorporated company.

(ii) A non-profit making company licensed under section 25 can be merged with a profit making company.

(iii) High Court can sanction a scheme of merger of a sick industrial company when a revival scheme is pending before BIFR.

(iv) An appeal can be preferred to the Supreme Court of India against the order passed under section 391/394 sanctioning a scheme of amalgamation.

(v) The court can modify ‘transfer date’ proposed in a scheme of amalgamation.

rchgiri

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CSoC King
CSoC King
Answers to the above posting:

(i) Incorrect

(ii) Correct

(iii) Incorrect

(iv) Correct

(v) Correct

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