I.D.
END TERM EXAMINATION, APRIL 2017
B.A.LL.B. (HONS.)
SEMESTER-VIII X
CLS-Corporate Reconstruction (Hons.-II)
Max. Marks: 60 Time Allowed: 3:00 Hrs.
Note: Answer five questions including Question No. 1 which is compulsory. The number of marks
carried by each question is indicated at the end of the question.
1. Answer the following (each answer should be in approximately 100 words): (Marks 2×10=20)
a. Representatives of both Kanchan Ltd. and Dhar Co. met on 1th April 2017. As Kanchan
Ltd. wanted to seek assistance from Dhar Co. in acquiring Aqua Infra Pvt. Ltd.
Representative of Dhar Co. agreed for the same but even after 20 days neither Kanchan
Ltd. nor Dhar Co. have not taken any step to execute their plan. Will this be considered as
Acquisition or just mere big talks? Give legal reasoning.
b. What do you mean by Demerger?
c. Takeover Code considers the acquisition of shares and voting rights. If a person purchases
convertible securities, so will it fall under the purview of Takeover Code? Discuss
d. Arka Corporation came up with a voluntary offer to purchase 10 shares of Aadhar Ltd.
for 300rs per share. Tendering period started from 1st Januray 2017, all of a sudden on 7th
January market prices of the shares dropped to Rs.75 per share. This would now turn to a
bad deal for Arka Corporation and thus on 9th Januray 2017 Arka Corporation changed the
offer price to Rs.76 per share. Is Arka Corporation allowed to make such changes? Is it a
valid open offer now? Explain with the help of legal provision.
e. What do you understand by Due Diligence in case of Corporate Reconstruction?
f. Company "A" came up with a voluntary offer on 1st November 2016 and acquired 23
of shares, now on 1st January 2017 they wanted to acquire further and came with the
Mandatory Offer. Target Co. "B" challenged this offer, stating that this is against the law.
Is the challenge justified? Reason.
g. What does Co-Generic Merger means?
h. Fast Track Merger is a new concept introduced in the Companies Act, 2013. Can Fast
Track Merger take place in all forms of companies? Explain with the help of legal
provision.
i. Is there any difference between Acquisition and Takeover? Can they be used
synonymously? Discuss.
j. Discuss in brief the concept of MAP.
PTO
2. Answer the following questions- (Marks 2.5×4=10)
a. XYZ Ltd. was holding share in Lifecare Ltd., one fine day they decided to sell
shares to Life care Ltd. back. On 6th June 2016 they did so. Shareholders are questioning
such transfer on the basis of disclosure. While XYZ Ltd. is taking a plea that as transfer is
it to target company itself then no need for disclosure. Do you agree with XYZ Ltd. What
disclosure shareholders are talking about?
b. Is it true that Post offer period and post tendering period are often used inter-changeably?
As both means a phase after consideration is paid for shares. Discuss the statement.
c. Explain the scenario when Voluntary Offer gets converted into Mandatory Offer.
d. Prakash Ltd. having 10% shareholding in target company CU Ltd. makes a mandatory
offer for further acquisition of shares. During that Mandatory Offer Janta Enterprise
makes a competing offer. What should be the minimum size of competing offer? Give
reasons.
3. Radha Venture Capital invested in Limelight Industries and in return of that investment they
got the right to appoint the Chairman of the Board; who would preside over policy decision
and vote whenever needed in case of deadlock. Will this right be considered as Control? Give
reason.
How is control defined in different legislations and through case laws? Also critically analyze
Bright Line Test. Do you think that this test would provide a solution to the disputed issue of
CONTROL. (Marks 10)
4. Discuss the following- (Marks 5×2=10)
a. Difference between Voluntary Offer and Mandatory Offer
b. and have a similar objective to acquire Sica Ltd, though nothing between 'and
was in writing. preferred one shot acquisition of shares and creeping
acquisition. Both use to criticize each other for such method, but were happy that soon
Sica will loose its control to one of them. Are these two A and B "Person Acting in
Concert". Prove by using the test of PAC given in the code.
5. Joint Venture is a form of corporate reconstruction. Akont Co. has its business in North India
and it wanted to expand its business in South India. Though they are bit skeptical so they
decided of going for a joint venture for one project with Jumanji Ltd. Suggest which kind of
Joint Venture should they form according to you? Why?
Also discuss the concept of Joint Venture in detail. (Marks 10)
6. Pirates Co. acquired control over Batman Ltd by purchasing 75% stake in the company.
Minority of the target company is now given a proposal to sell their share to acquirer. Mr.
Harry one of the minority shareholders refused to sell and as a result of it his share certificate
was cancelled by the target company. Mr. Harry has filed a suit challenging the action of
Target Company. Will he succeed in his action or the Target Company would be successful in
defending by taking arguing on the basis of squeeze out mechanism provided in the
Companies Act, 2013. Discuss the Squeeze out of Minority Shareholder mechanism also.
(Marks 10)
7. Answer the following question- (Marks 2.5×4=10)
a. Can all the creditors raise objection in a meeting where merger scheme is discussed?
Discuss with the help of legal provision.
b. How is merger defined in Income Tax Act? Is it a subset of amalgamation as per Act? In
case of cross border merger Tax Exemptions are given to Indian Transferee Companies.
What are those exemptions explain.
c. What do you mean by business and functional strategy?
d. Discuss do you understand by Direct and Indirect Acquisition.