Govt eyes twin legal tracks for Air India, Indian merger

New Delhi: With the empowered Group of Ministers (EGoM) clearing the way for merger of Air-India (AI) and Indian, the government is considering two legal options to merge the state-owned carriers under the Companies Act of 1956.
The first option envisages the ministry of company affairs passing an order, under Sections 391-394 of the Companies Act, on an application filed by the board of directors of the two companies. This route would require the two carriers to obtain creditors' approval — “majority” in number and 3/4th in terms of value.
The other option is an order passed by the central government, under Section 396 of the Companies Act, to merge two or more companies in public interest. The second route will give “all” creditors of both carriers the ‘right to object’ to the merger.
Sources said Accenture, the consultants assisting the government with the merger, has recommended the civil aviation ministry to adopt the first route.
26/02/07 Sunny Verma/Economic Times

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Categories: air india feb 2007, indian feb 2007