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CS Professional · Corporate Restructuring, Valuation and Insolvency · Regulatory Approvals of Scheme

Under a scheme, Sagar Ltd (transferee) offered to buy shares of Tara Ltd. Within four months of the offer, holders of 92% in value of the shares whose transfer is involved (excluding shares already held by Sagar Ltd) approved. Sagar Ltd wishes to acquire the dissenters' shares. Which statement is correct?

Sagar Ltd may give notice to dissenting shareholders at any time within two months after the four-month period expires. Approval by 92% in value exceeds the nine-tenths threshold in section 235(1), so unanimity is not needed.

  1. AIt may give notice to dissenting shareholders within two months after the expiry of the four monthsCorrect
  2. BIt may give notice only within one month of the offer
  3. CIt cannot proceed, as unanimity is needed
  4. DIt may give notice at any time within six months after the approval, with no limit

Explanation

Section 235(1): approval by at least nine-tenths in value within four months of the offer lets the transferee give notice at any time within two months after the four months expire. 92% exceeds nine-tenths, so the threshold is met; the other time limits are not in the section.

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