NCLT Kochi Approves Merger Of 51 Malabar Group Companies With Malabar Gold And Diamonds

The National Company Law Tribunal (NCLT) at Kochi has sanctioned a composite scheme of amalgamation involving 51 Malabar Group companies with and into Malabar Gold and Diamonds Limited (formerly known as Malabar Gold Limited), appointing April 1, 2025, as the appointed date.

A coram of Judicial Member Vinay Goel and Technical Member Ravichandran Ramasamy held that the scheme was fair and reasonable and was not prejudicial to the interests of the shareholders and creditors of the companies.

The 51 Transferor Companies belong to the Malabar Group, with their business activities and operations being directly or indirectly controlled by Malabar Gold and Diamonds Limited (MGDL) through shareholding arrangements and franchise agreements. Of these, one is a wholly owned subsidiary, 11 are subsidiaries and 17 are associate companies of MGDL.

The companies stated that the amalgamation is aimed at consolidating the jewellery business under one entity, achieving economies of scale, enabling better utilisation of resources and technology, improving access to funds at lower costs, and reducing compliance expenses. It is also expected to promote uniform workforce policies, cultural integration and better corporate governance, benefiting all stakeholders, including customers, creditors, employees and shareholders.

In the first motion proceedings, the Tribunal, by an order dated March 25, 2026 directed the convening of 139 meetings comprising 43 meetings of equity shareholders, 45 meetings of secured creditors and 51 meetings of unsecured creditors. Certain meetings were dispensed with based on consent affidavits, while meetings of secured creditors were not required for companies having no secured creditors. Subsequently, the companies filed the second motion petition seeking sanction of the scheme.

The Reserve Bank of India conveyed its no objection to the scheme subject to certain conditions. The Competition Commission of India also approved the proposed combination observing that it was not likely to cause an appreciable adverse effect on competition in India.

During the proceedings, the Regional Director and various statutory authorities raised observations regarding outstanding tax liabilities, statutory compliances, pending inquiries and employee related dues, among other issues. The companies filed their responses to these observations.

The Income Tax Department also pointed out that a search and seizure action conducted in the Malabar Group in 2019 had resulted in the quantification of undisclosed income of approximately ₹844.49 crore. The petitioners undertook to discharge all valid tax demands upon their final determination, stating that certain demands had already been paid, while the remaining demands were pending adjudication before the concerned authorities.

The Official Liquidator, after examining the books of accounts and statutory records of the 51 Companies, concluded that their affairs had not been conducted in a manner prejudicial to the interests of their members or public interest.

The Tribunal clarified that the amalgamation would not absolve the companies or their officers of liability arising from statutory violations.

“The sanction of the Scheme shall not prejudice the powers of any statutory or regulatory authority to initiate or continue proceedings in respect of any statutory non-compliance or liability.” it stated

It further directed that pending litigations involving the 51 Companies would continue by or against MGDL, which would also be responsible for their statutory liabilities arising out of such proceedings. Existing charges and securities were directed to be recognised without affecting the rights of secured creditors.

Perusing the relevant reports, the Tribunal observed:

“we are of the considered view that the Scheme is not prejudicial to the interest of the equity shareholders and creditors of the Transferor Company and the Transferee Company.”

It further noted:

“the Scheme appears to be fair and reasonable and is not in violation of any provisions of law and is not contrary to public policy.”

Accordingly, the Tribunal sanctioned the Scheme of Amalgamation with April 1, 2025, as its appointed date.

For Companies: Dr. K.S Ravichandran, PCS and Advocate Manjula Devi (KSR & Co)

For Regional Director: Dr. Avais DD

For Official Liquidator: Arjun C

For RoC: Savvy J Alapatt

For Income Tax Department: Advocate Varsha

For EPFO Department: Advocate Ajoy