Lavanya G T & Viola Rodrigues, Student, BBA LLB (Hons.) at School of Law, CHRIST (Deemed to be University), Bengaluru
ABSTRACT
The amalgamation scheme entails two companies merging and resulting in the business being consolidated into one entity and the combined entity's position being strengthened by allowing it to utilize and exploit the synergies of the two companies. As a consequence, it would be in the best interests of the Transferor Company and the Transferee Company and their respective shareholders. The amalgamation must follow global trends and developments in order to gain size, scale, synergy, and better financial strength and flexibility, as well as increase shareholder value. Scheme of Amalgamation should enrich both the transferor and the transferee companies, as well as the creditors and members of both the transferor and transferee companies. It should also be in the public interest and must enhance the welfare of the society as whole. The concept of public interest, in the case of a firm meant to thrive in a modern welfare state, moves the company beyond the traditional domain of being a concern in which only the shareholders are interested. It promotes the company's role in the public benefit or welfare of the community, or at the very least, not in a way that is pre-judicial to the interest of its member and to the public interest. The article discusses the importance of public interest in various scheme of amalgamation by presenting the relevance, analysis and findings of some cases. An attempt is made to bring out judiciary’s role in preventing schemes of amalgamation being sanctioned which are detrimental and contrary to public interest.
