BNP Paribas India Solutions Private Limited Vs

Prabhat Kumar, Member (Technical)

Heard the Learned Authorized Representative for the Petitioner Companies, the representative of the Regional Director (Western Region). No other objector has come before the Tribunal to oppose the Scheme and nor any party has controverted any averments made in the Petition.

The sanction of this Tribunal is sought under section 232 r/w Section 230 and other applicable provisions of the Companies Act, 2013 for Composite Scheme is of amalgamation amongst BNP Paribas India Solutions Private Limited (“Petitioner/ Transferee Company”) and BNP Paribas Global Securities Operations Private Limited (“Transferor Company”) and their respective shareholders and creditors (“Scheme”).

The Petitioner/ Transferee Company submits that the Petitioner/ Transferee Company is inter alia engaged in the business of data processing activities, information technology support services, financial control support services, accounting control, compliance related support services, risk control and related support services, administration and human resource support services and other information technology enabled support services.

The Board of Directors of the Petitioner/Transferee Company and Transferor Company, in their respective Board Meetings conducted on 23rd May, 2022 have approved the Scheme. The Appointed Date fixed under the Scheme is 1st April, 2023.

The Counsel for the Petitioner Company submits that the proposed Amalgamation would accomplish the following benefits –

(a) Consolidation of the business presently being carried on by the Transferor Company and the Petitioner/ Transferee Company, which shall create greater synergies between such business operations and within the group;

(b) Help realise local synergies, harnessing of governances, leverage economies of scale and achieve efficiencies whilst ensuring protection and retention of talent;

(c) Better alignment, coordination and streamlining of day-to-day operations, leading to improvement in overall working culture and environment.

That by Order dated 10th February, 2023 passed by this Tribunal in CA(CAA)/163/MB/2022, the Hon’ble Tribunal was, inter alia, pleased to dispense with the requirement of convening the meeting of the equity shareholders and unsecured creditors of the Petitioner/ Transferee Company. The Petitioner/ Transferee Company does not have any secured creditors. By Order dated 10th February, 2023, the Tribunal was pleased to direct the Petitioner/ Transferee Company to issue notice to its unsecured creditors.

The Counsel for the Petitioner/ Transferee Company submits that notice of the Scheme has been dispatched to 174 (one hundred and seventy four) unsecured creditors of the Petitioner/ Transferee Company (as on 31st October, 2022) by way of email and affidavit of compliance dated 30th June, 2023 recording the aforesaid compliances is filed before this Tribunal. The Petitioner/ Transferee Company has complied with all requirements as per directions of this Tribunal and it has made requisite filings to demonstrate compliance. Moreover, the Petitioner/ Transferee Company undertakes to comply with all statutory / regulatory requirements, if and to extent applicable, as may be required under the Companies Act, 2013 and the Rules made thereunder. The said undertaking is accepted.

The Regional Director has filed his report dated 26.07.2023 making certain observations. The Petitioner Companies have submitted/undertaken that:

i. The Petitioner/Transferee Company shall pass such accounting entries as are necessary and applicable to account for the arrangement as provided for in the Scheme in accordance with IND AS 103 or Accounting Standards – 14, AS-5(IND AS-8) etc. as may be applicable;

ii. The Petitioner / Transferee Company shall comply the requirements of Circular No. F. 7/12/2019/CL-I dated 21.08.2019, issued by the Ministry of Corporate Affairs;

iii. The Petitioner/Transferee Company shall comply with the provisions of Section 232(3)(i) of the 2013 Act with respect to the fees and stamp duty payable by the Petitioner / Transferee Company on account of the consolidation of the authorized share capital of the Transferor Company with the authorized share capital of the Petitioner / Transferee Company;

iv. The Scheme has been drawn up in compliance with the provisions of the Income Tax Act, 1961 including Section 2(1B);

v. The Scheme as enclosed with Company Scheme Application and the present Company Petition are one and the same document and there is no change or discrepancy in the Scheme;

vi. It is submitted that the Petitioner/ Transferee Company has not received a declaration in Form BEN-1 and consequently has not filed any Form BEN-2 since the requirement of notification in Form BEN-1 has not arisen in the facts of the present case. This is so since the member (BNP Paribas SA) of the reporting company (that is, the Petitioner/ Transferee Company) is a body corporate, and according to Explanation III to Rule 2(h) of the SBO Rules, there is no individual who holds a majority stake in BNP Paribas SA.;

vii. The Transferee Company will comply with Income Tax Provisions in relation to proceedings/claims under Income Tax Act against the Transferor Company; and

viii. Interest of the Creditors shall be protected.

Mr. Tushar Wagh, Deputy Director from the Office of Regional Director of Western Region, Mumbai appeared on the date of hearing and submits that above explanations and clarifications given by the Petitioner Companies in rejoinder are satisfactory and they have no further objection to the Scheme.

That vide order dated 10th May, 2023 in CP (CAA)/80 (CHE) /2022 in CA (CAA)/55/CHE/2022, the NCLT, Chennai Bench has sanctioned the Scheme filed on behalf of the Transferor Company.

The Income Tax Department will be at liberty to examine the aspect of any tax payable as a result of this scheme and it shall be open to the income tax authorities to take necessary action as possible under the Income Tax Law.

From the material on record, the Scheme appears to be fair and reasonable and does not violate of any provisions of law and is not contrary to public policy. Since all the requisite statutory compliances have been fulfilled, consolidated Company Scheme Petition in C.P. (CAA) 108 / 2023 filed by Petitioner Company are made absolute in terms of prayer clause (v) of the said Company Scheme Petition.

The Scheme is sanctioned hereby, and the Appointed Date of the Scheme would be 1st April, 2023.

The Petitioner Company is directed to lodge a certified copy of this order along with a copy of the Scheme with the concerned Registrar of Companies, electronically in E-Form INC-28 within 30 (thirty) days from the date of receipt of the Order, duly certified by the Designated Registrar of this Tribunal.

The Petitioner Company is directed to lodge a certified copy of this order and the Scheme duly authenticated by the Deputy / Assistant Registrar of this Tribunal, with the concerned Superintendent of Stamps, for the purpose of adjudication of stamp duty, payable, if any, within 60 (sixty) working days from the date of receipt of certified copy of the Order from the Registry of this Tribunal.

All concerned regulatory authorities to act on a copy of this Order duly certified by the Deputy Registrar / Assistant Registrar of this Tribunal along with copy of the Scheme.

Any person interested is at liberty to apply this Tribunal in the above matters for any direction that may be necessary.

Any concerned Authorities are at liberty to approach this Tribunal for any further clarification as may be necessary.

Ordered accordingly. C.P. (CAA) / 108 / MB / 2023 is allowed and disposed-off.