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Informist, Thursday, Nov. 7, 2024

 

NEW DELHI – The Delhi High Court has quashed an order of the Collector of Stamps, Delhi, demanding payment of INR 2.2 billion towards stamp duty and INR 690 mln rupees as penalty from Ambuja Cements Ltd., in a case related to a scheme of arrangement involving Holcim (India) Pvt. Ltd.

 

The high court said Holcim and Ambuja Cements India Pvt. Ltd. were wholly owned subsidiaries of a common parent company--Holderind Investments Ltd., Mauritius—and so, the scheme of amalgamation and the merger order were covered by Notification 13 of 1937 of the government of India, which exempts instruments such as the scheme of arrangement from stamp duty.

 

"The present petition is allowed in view of above discussion," the court said. "Accordingly, the show-cause notice dated Mar. 20, 2014, and the impugned order dated Aug. 07, 2014, issued by the respondent are quashed and set aside along with all consequential proceedings."

 

In 2009, the boards of Holcim and Ambuja Cements India had approved a scheme of amalgamation between the companies. Ambuja Cements India did not have any immovable property at the time and the only movable property it held was its stake in ACC Ltd. and Ambuja Cements Ltd. in dematerialized form. In 2011, the high court approved the merger of Ambuja Cements India into Holcim.

 

Thereafter, Holcim, at a meeting in 2012, issued 3.54 billion equity shares to shareholders of Ambuja Cements India in accordance with the share exchange ratio, and the latter company was dissolved without being wound up.

 

Holcim then received a show-cause notice from the Collector of Stamps for not paying stamp duty on the merger order. Later, the Collector of Stamps passed an order and demanded payment of stamp duty and penalty. The authority also held that Holcim was liable to pay stamp duty on the issue of 3.54 billion equity shares pursuant to the merger. 

 

In 2022, the Adani family, through an offshore special purpose vehicle, entered into definitive agreements for the acquisition of Holcim Ltd.’s entire stake in Ambuja Cements Ltd. and ACC Ltd. Consequently, the litigation shifted to Ambuja Cements Ltd.

 

On Thursday, shares of Ambuja Cements ended over 2% lower at INR 570.70 rupees on the National Stock Exchange.  End

 

Reported by Surya Tripathi

Edited by Rajeev Pai

 

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