Court approves Essar bulk terminal’s equity buyback offerMay 9th, 2011 - 11:00 pm ICT by IANS
Gandhinagar, May 9 (IANS) The Gujarat High Court has sanctioned Essar Bulk Terminal Limited’s scheme of purchasing its equity shares through buyback offer from its equity shareholders.
A single judge bench of Justice Anant Dave while allowing the company’s petition, said in an order made available Monday: “I am satisfied that the scheme of arrangement would be in the interest of the company and its members and creditors. Prayers in terms of paragraph 18 (B) are hereby granted.”
The court further noted: “Considering the strong financial position of the petitioner company, the rights and interests of the creditors shall not be prejudicially affected by the proposed scheme.”
During the hearing, the central government, through its counsel P.S. Champaneri, raised the issue of compliance of the procedure prescribed under section 77 A of the Companies Act for buyback of the shares by the company.
However, the counsel for the company, Saurabh Soparkar, submitted that section 77A was not given any overriding effect over the provisions of Section 391.
He further submitted that the legislative intention behind the introduction of section 77A was only to provide an alternative method by which the company can buyback its shares.
He argued that there was no legal bar to propose the buyback under section 391. He claimed that the company has chosen to adopt the said scheme under the provisions of Companies Act and the high court has power to sanction such a scheme.
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Tags: anant, bench, central government, compliance, creditors, financial position, gujarat high court, intention, paragraph, petition, petitioner, prayers, provisions, scheme of arrangement, section 77a, shareholders