41/2014 Judicial Companies Misc. Gadoon Textile Mills Ltd. and Others (Applicant) V/S .. (Respondent)

41/2014 Judicial Companies Misc. Gadoon Textile Mills Ltd. and Others (Applicant) V/S .. (Respondent) Sindh High Court

Bench: Hon'ble Chief Justice Mr. Justice Muhammad Shafi Siddiqui(Author) Order Date: 04-JUN-14

"Companies Ordinance (XLVII of 1984)--- ----Ss. 284, 285, 286, 287 & 288---Demerger of companies---Collective business decision---Scope---Determination of consideration including the commercial aspect of the merger along with manner of the swap ratio was primarily and substantially the prerogative of the members of the respective companies---Businessmen had to take decision considering all the pros and cons of demerger and merger of companies---While taking such decision there would be chances of success and failure but while questioning such decision the bona fides was the real test---Businessmen could take decision foreseeing the future aspect---Court could only see that all the legal formalities had been fulfilled and scheme was neither unjust nor unfair or against the national interest but could not challenge the wisdom of a decision of businessmen---While demerging shares of Real Estate and Textile the representatives or shareholders might decide to keep them separately which could not be challenged before the court---Company was conducting two business which were being separated---Advantages and disadvantages of keeping them together would remain there by disassociating the two businesses and their shareholding---Both would separately yield profit and loss hence the cumulative effect of the net result would not matter---Proposed scheme was based on the principle that each shareholder would get its respective share in terms of percentage that he was in collective business---Petition for demerger of companies was granted." Advocates: M/S. MOHSIN TAYEBALY & CO.(FIRM-118-SBC-KHI),Arshad Mohsin Tayebaly(ADVO-3740-SBC-KHI)