In re TVS Holdings Limited (NCLT Chennai)
Summary: The National Company Law Tribunal, Division Bench-I, Chennai, comprising Sanjiv Jain, Member (Judicial), and Venkataraman Subramaniam, Member (Technical), sanctioned the Scheme of Arrangement proposed by TVS Holdings Limited under Sections 230 to 232 of the Companies Act, 2013, by order pronounced on 18 August 2026. The order records that the Scheme involves issuance of fully paid-up preference shares by way of bonus to the company’s equity shareholders.
The petition was filed by TVS Holdings Limited and its shareholders under Sections 230 to 232 of the Companies Act, 2013, read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. In the First Motion Application, CA(CAA)/15/CHE/2026, the Tribunal had dispensed with the meeting of secured creditors and directed convening of meetings of equity shareholders and unsecured creditors. The Chairperson’s report dated 24 April 2026 recorded that 272 out of 273 equity shareholders who attended the meeting, constituting 99%, voted in favour of the Scheme. The second motion petition was subsequently filed on 28 April 2026.
The Scheme’s stated rationale was that TVS Holdings had accumulated substantial surplus reserves from retained profits which exceeded its current and foreseeable future business requirements. The company proposed to deploy a considerable portion of those surplus funds by issuing fully paid-up preference shares by way of bonus to its equity shareholders. The proposed preference shares were intended to be listed on the stock exchanges, thereby providing shareholders with a near-cash traded and encashable instrument while giving the company flexibility in managing liquidity until redemption.
