APL gets stay on HC order seeking opinion of DRI, ED

The Adani Power Limited (APL) has obtained stay on a Gujarat High Court order which had sought additional details and reports from various investigating agencies before giving final nod to amalgamation of Mauritius-based Growmore Trade and Investment Private Limited (GTIPL) with APL.

The stay was granted last week by vacation bench of Justice M R Shah of the High Court on a appeal by the company. Further hearing on the appeal has been scheduled for June 12.

The order on which the stay was granted was passed last month by Justice K M Thaker hearing the petition of Amalgamation of GTIPL with APL. Through the order, opinion of investigating agencies like the Enforcement Directorate (ED), Directorate of Revenue Intelligence (DRI) and the Income Tax department was sought on the grounds that GTIPL, which is based in tax heaven Mauritius, did not have any assets. The petition was filed by APL last year in the High Court as required under the Companies Act.

 

The agencies were asked give their opinions in 40 days with regard to the legality of the proposed merger, GTIPL's conduct, business and affairs, its holding company, and its compliance with various laws, rules and guidelines of the government. The court had further said that it would be open to the office of Enforcement Directorate and Income Tax Department to seek comments from RBI.

"In view of the two important aspects or provisions in the scheme, the Court considers it appropriate to first call for certain details and reports, in addition to the compliance of the conditions and requirement demanded by the Court by way of the direction in present order, before taking final decision and before passing final order. One of the two aspects is about the exchange ratio and the second is the fact that the transferor company does not have any assets or properties," the court had observed in the order.

The court said that there did not appear any ground to justify any reservation on exchange ratio as it was approved by majority of shareholders. One of the shareholders had opposed the amalgamation in the court on the ground that GTIPL was based in a tax haven country Mauritius and it did not have any business income.

"The Court considered it appropriate and necessary to pass certain directions, more particularly because the transferor (GTIPL) does not have any assets, which are mentioned in present order and to defer the final order regarding sanction until the reports by the mentioned authorities are submitted."

"So as to remove any doubt or reservation and to ensure that there may not be any breach of any provision of any applicable laws, Rules, policy, etc. or any illegality or irregularity, more particularly in view of the fact that the shares of the transferee company are proposed to be issued and allotted in the above mentioned ratio to the members of the transferor company which has no assets, the Court has considered it appropriate to pass final order only after and subject to the reports/views from the concerned and competent authority," the court had observed.

The court had also directed APL to apply for and obtain, within prescribed time limit and in prescribed manner, all necessary permissions, licences, registrations and certificates, required under all relevant and applicable laws, rules and regulations.