ORDER SHEET

Order Sheet

IN THE HIGH COURT OF SINDH KARACHI

J. Misc. No. 14 of 2015

Date	Order with signature of Judge

For hearing of Main Petition :

Petitioners : (1) Apollo Pharma Limited,

(2) AGP (Private) Limited and

(3) AGP Healthcare (Private) Limited,

through M/S Mehmood Mandviwala and Naveed-ul-Haq,

Advocates.

Date of hearing : 30.11.2015.

O R D E R

NADEEM AKHTAR, J. – This petition has been filed under Section 284 read with Sections 285 to 288 of the Companies Ordinance, 1984, for the sanction of the Scheme of Arrangement set forth in Annexure ‘A’ to the petition for amalgamation of AGP (Pvt.) Limited (petitioner No.2) and AGP Healthcare (Pvt.) Limited (petitioner No.3) with and into Apollo Pharma Limited (petitioner No.1). The above named three petitioners have prayed as under :

“1. The Petitioners therefore humbly pray that, after the Members of the Petitioners have approved, adopted and agreed the Scheme of Arrangement by the requisite statutory majority at the meeting to be convened under the Order of this Hon’ble Court requests in the interlocutory application aforesaid of the Petitioners, this Hon’ble Court may be pleased to make the following Order ;

(a) an order under Section 284(2) of the Companies Ordinance, 1984 sanctioning the Scheme of Arrangement as set forth in Annexure A hereto so as to make the Scheme of Arrangement binding on the Petitioners and its Members ;

(b) the following orders so as to take effect at the same time as the order sanctioning the Scheme of Arrangement takes effect in accordance with Section 284(3) of the Companies Ordinance, 1984, namely :

(i) an order under Section 287(1)(a) of the Companies Ordinance, 1984 transferring to and vesting in the Petitioner No.1 the whole undertaking of the Petitioner No.2 and the Petitioner No.3 together with all properties, assets, rights, liabilities and obligations of every description including those described in the Scheme of Arrangement.

(ii) an order under Section 287(1)(c) of the Companies Ordinance, 1984 directing that all legal proceedings, if any, instituted by or against the Petitioner No.2 and Petitioner No.3 which may be pending shall be continued by or against the Petitioner No.1 ;

(iii) An order under Section 287(1)(d) of the Companies Ordinance, 1984 declaring the dissolution, without winding up, of the Petitioner No.2 and the Petitioner No.3

(c) Such further or other order or orders as may deem just and proper to this Hon’ble Court.”

2. All the three petitioner-companies have been incorporated and are existing under the Companies Ordinance, 1984, (‘the Ordinance’). Their objects are set forth in their respective Memorandums and Articles of Association, copies whereof are attached to the petition. Petitioner No.1, which is a public unlisted company having authorized capital of Rs.3,000,000,000.00 and issued capital of Rs.2,800,000,000.00, was incorporated solely for the purpose of acquiring petitioners 2 and 3. It is stated that it has not previously traded and does not hold any asset of its own. Petitioner No.2 is a private pharmaceutical company with share capital of Rs.300,000,000.00 divided into 300,000 ordinary shares of Rs.1,000.00 each, of which 100,000 ordinary shares amounting to Rs.100,000,000.00 are issued and fully paid up. It is engaged in the manufacturing, marketing and sales of pharmaceutical and healthcare products in the domestic and export markets. Petitioner No.3 is also a private company with share capital of Rs.10,000,000.00 divided into 1,000,000 ordinary shares of Rs.10.00, each of which 1,000,000 ordinary shares amounting to Rs.10,000,000.00 are issued and fully paid up. It is engaged in the business of providing toll-manufacturing facilities for petitioner No.2.

3. The principal object of the Scheme of Arrangement submitted for the approval of this Court is to effect the amalgamation of petitioners 2 and 3 with and into petitioner No.1, by transferring to and vesting in the petitioner No.1 the whole undertakings of petitioners 2 and 3 together with all properties, assets, rights, liabilities and obligations of every description including those described in the Scheme of Arrangement ; and, the allotment of fully paid up ordinary shares of petitioner No.1 to the registered shareholders of petitioners 2 and 3 in lieu of shares held by them. It is stated that since petitioners 2 and 3 are 100% owned subsidiaries of petitioner No.1, no new shares would be required to be issued, and consequently petitioners 2 and 3 would be dissolved without winding up on the effective date stipulated in the Scheme of Arrangement. In support of the Scheme of Arrangement, the petitioners have filed recommendations / report / certificate dated 06.04.2015 issued by Ernst & Young Ford Rhodes Sidat Hyder, Chartered Accountants, which has been accepted by the respective directors of the petitioners.

4. It is contended that the Scheme of Arrangement is (i) between petitioner No.2 and its members and petitioner No.1 and its members, and (ii) between petitioner No.3 and its members and petitioner No.1 and its members. It is further contended that all the members of petitioners 1, 2 and 3 are of a single class in their respective classes, being the holders of ordinary share certificates. It is also contended that if the Scheme of Arrangement is approved, it shall not diminish or in any way affect the rights and securities of the creditors of petitioners 2 and 3, all of whom will become the creditors of petitioner No.1, and petitioner No.1 will be obliged to discharge all such liabilities and to perform all such obligations of petitioners 2 and 3 in favour of the said creditors. It has been specifically pointed out that no investigation or the like proceedings are pending in relation to any of the petitioners under Section 263 or under any other provisions of the Ordinance or under any other law for the time being in force.

5. In compliance of the order passed on 08.07.2015, notice of the petition was published in the Gazette of Pakistan dated 12.08.2015, and also in daily newspapers ‘Dawn’ and ‘Jang’ on 15.07.2015. Notice was also affixed on the Court notice board and it was issued to the Additional Registrar of Companies too. Vide order dated 15.09.2015 passed on CMA No.139/2015 filed by the petitioners, they were allowed to convene separate meetings of their respective shareholders and creditors for approving the Scheme of Arrangement in terms of paragraph 15 of the said application and to submit their respective reports before this Court. In compliance of the said order, separate reports were filed on 14.10.2015 by Mr. Tariq Moinuddin Khan as Chairman of petitioners 1, 2 and 3. As per the said reports, after circulating a copy of the Scheme of Arrangement along with the statement of information under Section 286 of the Ordinance to the members of petitioners 1, 2 and 3, separate meetings of petitioners 1, 2 and 3 were held with the requisite quorum on 07.10.2015 at their respective registered offices, wherein all the members representing 100% of their total issued and paid up capital voted in favour of the resolution for the amalgamation of petitioners 2 and 3 with and into petitioner No.1 in accordance with the Scheme of Arrangement.

6. Para-wise comments have been filed by SECP, wherein it has been confirmed that no investigation proceedings or the like are pending in relation to petitioners 2 and 3 either under Section 263 or under any other provisions of the Ordinance. SECP has prayed for passing any order as may be deemed fit and proper by this Court. However, it has been pointed out that audited accounts for the year ended December 31, 2014 were not filed with SECP by petitioner No.1. In the statement / report submitted today by SECP, it has confirmed that the aforesaid accounts have been submitted by petitioner No.1, and as such SECP has no objection to the sanction of the Scheme of Arrangement.

7. I have examined the Scheme of Arrangement wherein the merger of petitioners 2 and 3 with and into petitioner No.1 as well as the procedure and the implications thereof have been set forth in detail. In compliance of Section 284(2) of the Ordinance petitioners 1, 2 and 3 have disclosed to the Court all material facts relating to them including the latest financial position and the latest audited accounts for the year ended December 31, 2014 ; and, have also stated that no investigation or the like proceedings are pending in relation to any of the petitioners under Section 263 or under any other provisions of the Ordinance or under any other law for the time being in force, which fact has been confirmed by SECP as noted above. The Scheme of Arrangement has been unanimously approved by the members of petitioners 1, 2 and 3 in their respective meetings held with the permission of this Court. Thus, all legal and formal requirements for the sanction of the Scheme of Arrangement have been duly complied with by the petitioners.

8. The object of the Scheme of Arrangement, as stated therein, appears to be lawful, and the proposed merger of petitioners 2 and 3 with and into petitioner No.1 does not appear to be against the public interest / policy, or in violation of any law. In view of the above and also as the members of the petitioners have unanimously approved the said proposed merger, the petition is granted as prayed and the Scheme of Arrangement is hereby sanctioned. Resultantly, AGP (Pvt.) Limited (petitioner No.2) and AGP Healthcare (Pvt.) Limited (petitioner No.3) shall stand merged with and into Apollo Pharma Limited (petitioner No.1) in accordance with the Scheme of Arrangement.

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J U D G E