NCLT Approves Siyaram Silk Mills' Bonus Preference Shares Scheme

The National Company Law Tribunal (NCLT) has sanctioned a Scheme of Arrangement proposed by Siyaram Silk Mills Limited, allowing the company to issue bonus preference shares to its equity shareholders. The scheme utilises the company's accumulated general reserves to reward shareholders.

The tribunal, comprising Judicial Member K.R. Saji Kumar and Technical Member Anil Raj Chellan, passed the order on July 21, 2026, on a petition filed under Section 230 of the Companies Act, 2013. The order states that the scheme is fair, reasonable, and compliant with statutory requirements, and not contrary to public policy.

According to Siyaram Silk Mills, the company has accumulated substantial surplus reserves over the years, exceeding its current and anticipated business requirements. The company proposes to utilise these excess funds by issuing fully paid-up listed preference shares to its equity shareholders as bonus shares under the scheme of arrangement.

The company believes that this move will reward shareholders while maintaining financial stability, provide shareholders with a listed security offering liquidity, and uphold corporate governance and transparency. The scheme has been unanimously approved by the company's Board of Directors and received the requisite majority approval from equity shareholders and unsecured creditors.

The NCLT noted that all statutory compliances had been fulfilled and no objections had been received from any stakeholder. The tribunal directed the company to file the certified copy of the order with the Registrar of Companies, comply with all statutory formalities, and submit the scheme before the Superintendent of Stamps for adjudication.

The scheme seeks to distribute surplus reserves through the issuance of listed preference shares rather than cash. This approach allows the company to benefit shareholders while continuing to meet all obligations towards lenders and other stakeholders.

Siyaram Silk Mills' strong cash flow position and sufficient liquidity to meet all liabilities enabled the company to propose this scheme. The company's decision to utilise its accumulated general reserves to issue bonus preference shares demonstrates its commitment to rewarding shareholders and maintaining financial stability.

The NCLT's approval of the scheme is a significant development for Siyaram Silk Mills and its shareholders. The company's ability to utilise its accumulated general reserves to issue bonus preference shares will provide shareholders with a listed security offering liquidity and uphold corporate governance and transparency.

In conclusion, the NCLT's sanction of Siyaram Silk Mills' Scheme of Arrangement is a positive development for the company and its shareholders. The scheme's approval demonstrates the company's commitment to rewarding shareholders and maintaining financial stability, while also upholding corporate governance and transparency.

The approval of the scheme is also a testament to the company's strong cash flow position and sufficient liquidity to meet all liabilities. As the company moves forward with the implementation of the scheme, it is likely to have a positive impact on the company's shareholders and its overall financial stability.

The NCLT's decision to sanction the scheme is a significant milestone for Siyaram Silk Mills, and it will be interesting to see how the company's shareholders respond to the issuance of bonus preference shares. The company's commitment to rewarding shareholders and maintaining financial stability is a positive development, and it is likely to have a lasting impact on the company's financial stability and growth.

In the context of the Indian corporate landscape, the NCLT's approval of Siyaram Silk Mills' Scheme of Arrangement is a significant development. The scheme's approval demonstrates the company's commitment to corporate governance and transparency, and it is likely to have a positive impact on the company's reputation and financial stability.

Overall, the NCLT's sanction of Siyaram Silk Mills' Scheme of Arrangement is a positive development for the company and its shareholders. The scheme's approval demonstrates the company's commitment to rewarding shareholders and maintaining financial stability, while also upholding corporate governance and transparency.

The significance of this development for Mumbai and India lies in its demonstration of the company's commitment to corporate governance and transparency. The scheme's approval is a testament to the company's strong cash flow position and sufficient liquidity to meet all liabilities, and it is likely to have a positive impact on the company's financial stability and growth.

In conclusion, the NCLT's approval of Siyaram Silk Mills' Scheme of Arrangement is a significant development for the company and its shareholders. The scheme's approval demonstrates the company's commitment to rewarding shareholders and maintaining financial stability, while also upholding corporate governance and transparency. This development is likely to have a positive impact on the company's financial stability and growth, and it demonstrates the company's commitment to corporate governance and transparency.