The Chennai Bench of the National Company Law Tribunal (NCLT), on 3 November, sanctioned a scheme of amalgamation between Jana Holdings Limited and its parent company, Jana Capital Limited, observing that the scheme was prima facie not detrimental to the interests of the companies' members.
A Bench comprising Judicial Member Jyoti Kumar Tripathi and Technical Member Ravichandran Ramasamy allowed the companies' joint petition, holding that the scheme could be sanctioned as the statutory requirements had been fulfilled and no material objections remained from the statutory authorities. It observed:
“This Tribunal is of the view that the scheme as contemplated by the Petitioner companies seems to be prima facie not, in any way detrimental to the interest of the members of the Companies.”
Jana Holdings is a wholly owned subsidiary of Jana Capital. Established in January 2017 as a Non-Operative Financial Holding Company, Jana Holdings does not carry out independent business operations apart from raising funds through non-convertible debentures (NCDs) and making investments.
The amalgamation aims to reduce operational costs and regulatory compliances, eliminate duplication of administrative functions and streamline management by combining the workforce under a single management structure.
Upon completion of the merger, Jana Capital will directly hold Jana Holdings' existing shareholding in Jana Small Finance Bank, without any change in the promoter holding percentage.
During the first motion proceedings, the Tribunal, by an order dated 10 October 2025, dispensed with the meetings of the equity shareholders, secured creditors and unsecured creditors of both companies.
The Regional Director raised concerns over Jana Holdings' negative net worth, deficit in Net Owned Funds, alleged non-compliance with Reserve Bank of India (RBI) norms and adverse auditor remarks, but ultimately conveyed no objection to the scheme.
The Official Liquidator sought clarifications regarding the source of funds used to invest in Jana Small Finance Bank. It noted that borrowings of approximately Rs. 705.74 crore through NCDs were under scrutiny by the Income Tax authorities.
The Income Tax Department also conveyed no objection to the scheme while reserving its right to continue the pending scrutiny proceedings.
The companies filed responses to the observations raised by the Regional Director, the Official Liquidator and the Income Tax authorities, providing clarifications on the issues flagged by them.
Considering the responses and the statutory compliances, the Tribunal found no material objection to sanctioning the scheme. However, it clarified that the sanction would not prevent the authorities from taking action for any statutory or regulatory violations. It said:
“Notwithstanding the above, if there is any deficiency found or, the violation committed qua any enactment, statutory rule or regulation, the sanction granted by this Tribunal will not come in the way of action being taken, albeit, in accordance with the law, against the concerned persons, directors and officials of the petitioners.”
Accordingly, the NCLT sanctioned the Scheme of Amalgamation.
For Petitioners: Advocate Thirupal Gorige
For Regional Director: Advocate Avinash Krishnan Ravi
For Income Tax Dept.: Advocate Rajkumar Jhabakh
For Official Liquidator: Chaitanya, AOL and B. Palani for OL