Rajeswara Rao Vittanala, Member - (1.) The present joint Company Application bearing CA (CAA) No. 77/230/HDB/2017 is filed by Karvy Consultants Limited (1st Applicant/Demerged Company) , Karvy Computershare Private Limited (2nd Applicant/Transferor Company) and Karvy Fintech Private Limited (3rd Applicant / Transferee Company) under Section 230 of Companies Act, 2013, by inter-alia seeking following reliefs:- (a) To dispense with meeting of Equity Shareholders of the First Applicant Company, Second Applicant Company and the Third Applicant Company. (b) To dispense with meetings of un-secured creditors of karvy Consultants an Karvy Fintech Private Ltd (c) To convene a meeting of unsecured creditors of Karvy Computer Private Limited/2nd applicant Company on 9th day of December, 2017 at the Corporate Office of Company situated at Karvy Selenium Tower B, Plot No. 31 &32,Financial District Nankramguda Serilingampally Mandal, Gachibowli, Hyderabad - 500032 at 11.30 AM. Quoram may be fixed at 30 unsecured creditors, who may be present either in person or through proxy .And notices may be published in Business Standard English daily and Telugu daily
(2.) Brief facts, leading to filing of the present case, are as follows: (1) M/s. Karvy Consultants Limited (herein referred to as "the Demerged Company" or "the First Applicant Company") (a) M/s. Karvy Consultants Limited (herein referred to as "the Demerged Company" or "the First Applicant Company") was incorporated under the Companies Act, 1956. Its registered Office is situated at Karvy House, 46, Avenue, 4, Street No. 1, Banjara Hills, Hyderabad, Andhra Pradesh - TG 500034, India. (b) The authorized, issued, subscribed and paid-up share capital of the First Applicant Company as on 31 March 2017 is as follows: Subsequent to the above date and till the date of the Scheme being approved by the Board of Directors of the First Applicant Company, there has been no . change in the authorized, issued, subscribed and paid-up share capital of the First Applicant Company. (c) The First Applicant Company was promoted with the objective of providing financial advisory services. The First Applicant Company started its foray into the capital markets with the Registrars to Issue and Share Transfer Agency ('RTA') activity in 1982. By leveraging its resources and extensive use of information technology, the First Applicant Company ventured into various other business activities viz., share broking services, data management services, data analysis services, insurance repository services etc., either directly or through its subsidiaries / joint-venture / associate company. The First Applicant Company also provides management consultancy, advisory and support services to its various businesses undertaken through its subsidiaries / joint-venture / associate company. (2) M/s. Karvy Computershare Private Limited (herein referred to as "Transferor Company" or "the Second Applicant Company") (a) M/s. Karvy Computershare Private Limited(herein referred to as "Transferor Company" or "the Second Applicant Company") was incorporated under the Companies Act, 1956, in Hyderabad. The registered office of the Second Applicant Company is situated at Karvy House, 46, Avenue, 4th Street, No. 1, Banjara Hills, Hyderabad, Andhra Pradesh - TG 500034,lndia. (b) The authorized, issued and paid-up share capital of the Second Applicant Company as on 31 March 2017 is as follows: Subsequent to the above date and till the date of the Scheme being approved by the Board of Directors of the Second Applicant Company, there has been no change in the authorized, issued, subscribed and paid-up share capital of the Second Applicant Company. (c) The Second Applicant Company is engaged in the business of security registry in India and abroad and is registered with Securities and Exchange Board of India ('SEBI') under SEBI (Registrars to an Issue and Share Transfer Agent) Regulations, 1993 and Pension Fund Regulatory and Development Authority ('PFRDA') under PFRDA (Central Recordkeeping Agency) Regulations 2015. (3) M/s. KarvyFintech Private Limited (earlier known as KCPL Advisory Services Private Limited) (here\n referred to as "the Transferee Company" or "the Third Applicant Company") (a) M/s. KarvyFintech Private Limited (earlier known as . KCPL Advisory Services Private Limited) (herein referred to as "the Transferee Company" or "the Third Applicant Company") was incorporated under the Companies Act, 2013, in Hyderabad. Its Registered Office is situated at Plot No.31/P, Karvy Millennium, Nanakramguda, Gachibowli, Hyderabad, Telangana-500032, India. (b) The authorized, issued and paid-up share capital of the Third Applicant Company as on 30 June 2017is as follows: Subsequent to the above and till the date of the Scheme being approved by the Board of Directors of the Third Applicant Company, there has been no change in the authorized, issued, subscribed and paid-up share capital of the Third Applicant Company. (c) The Third Applicant Company isincorporated with an objective to engage in the business of management consultancy, advisory services in relation to corporate legal affairs, secretarial, accounting etc and security registry business in India and abroad.
(3.) Rationale FOR THE PROPOSED COMPOSITE SCHEME OF ARRANGEMENT The circumstances that have necessitated or justified the proposed composite scheme andits main benefits are inter alia, summarised as under: (i) Over the last few decades, the RTA Business (as particularly defined in the Scheme) of KCL has grown significantly and currently services over 70 million investors across 23 domestic mutual funds and over 500 listed corporate companies. Considering the existing Indian financial markets, the promoters believe that there are robust growth opportunities for the RTA Business in India and globally. The promoters wish to further explore and develop the RTA Business, especially the wealth administration business across hedge funds, private wealth management, portfolio management services and pension fund administration services and also expand across new geographies. (ii) Given that KCL is presently operating in different segments, the promoters believe that KCL would not be in a position to provide the desired attention to the RTA Business in the existing set-up.Accordingly, to have greater management focus on the RTA Business, it is proposed to demerge the RTA Business alongwith investment in KCPL to KFPL and subsequently merge KCPL with KFPL. The segregation and consolidation of RTA Business in KFPL shall be in the larger interest of shareholders and creditors of KCL and KCPL. (iii) Accordingly, the proposed scheme will enable better and more efficient management, control and running of the RTA Business. Further, it will also enable KCL to focus and enhance its remaining business operations by streamlining operations and ensuring better and more efficient management control. (iv) Segregating business would enable independent business opportunities, attracting different sets of investors, strategic partners, lenders and other stakeholders. Thereby, resulting in unlocking and maximizing stakeholder's value. (v) Further, the Scheme would bring about synergy of operations and greater internal control on business processes and ease in decision making. (vi) Thus, with the aforesaid objectives, it is proposed to demerge the Demerged Undertaking of KCL into KFPL and thereafter amalgamate KCPL with KFPL.;