NCLT Sanctions Cross-Border Merger of Star Television Productions with Jio Star India
NCLT Sanctions Cross-Border Merger of Star Television Productions with Jio Star India
Introduction
The National Company Law Tribunal (NCLT), Mumbai Bench-I, has sanctioned the cross-border merger of Star Television Productions Limited (STPL), incorporated in the British Virgin Islands, with Star India Private Limited, now operating as Jio Star India Private Limited. The order marks a key step in consolidating the overseas entity with the Indian company.
Factual Background
The merger is part of the Reliance-Disney venture, aimed at simplifying the corporate structure and optimizing costs. The scheme involves the issuance and allotment of equity shares by Jio Star India to the shareholders of STPL.
Procedural Background
The petitioners filed an application before the NCLT, seeking sanction for the cross-border merger. The Tribunal directed the convening of a meeting of unsecured creditors, which unanimously approved the proposal. An affidavit of compliance was also filed, confirming that the scheme was fair and reasonable.
Issues
1. Cross-Border Merger: Whether the NCLT should sanction the cross-border merger of STPL with Jio Star India Private Limited.
2. Compliance with Regulations: Whether the petitioner has complied with the relevant regulations and laws governing cross-border mergers.
Reasoning & Analysis
The bench of Prabhat Kumar Member (Technical) and Sushil Mahadeorao Kochey Member (Judicial) observed that the scheme was "fair and reasonable, not violative of law or contrary to public policy." The Tribunal took note of the undertakings given by the petitioner, including confirmation that creditors' interests are safeguarded and that accounting treatment will align with Indian standards.
Decision
The NCLT sanctioned the cross-border merger, directing the petitioner company to file the certified copy of the order with the Registrar of Companies in e-Form INC-28 within 30 days. The Tribunal also noted that approvals from the Reserve Bank of India were not needed for this merger.
Implications
The NCLT's decision marks a significant step in the consolidation of the Reliance-Disney venture. The sanction of the cross-border merger will simplify the corporate structure and optimize costs, leading to smoother business operations.
Conclusion
The NCLT's judgment in this case highlights the importance of compliance with regulations and laws governing cross-border mergers. The decision is a significant milestone in the consolidation of the Reliance-Disney venture.
