The National Company Law Appellate Tribunal (NCLAT) has accepted a petition filed by former Videocon group Chairman and Managing Director Venugopal Dhoot challenging the insolvency court NCLT's approval of Anil Agarwal's Twin Star Technologies' Rs. 2,962 crore takeover bid for the group's 13 companies.
The Resolution Professional, lenders and Twin Star Technologies have all been served with notices by the National Company Law Appellate Tribunal (NCLAT), requiring them to respond by 17 September 2021.
"The submissions of numerous parties have been taken into consideration. We accept the appeal, and the respondents are required to file a reply by 15 September 2021, followed by a rejoinder, if any, by 17 September 2021 "The NCLAT opined.
"Let the matter be listed 'for hearing' on 20 September 2021," Justice J. K. Jain and the Technical Member A. K. Mishra said on behalf of a two-member panel.
On 8 June 2021 Order, the Mumbai Bench of the National Company Law Tribunal (NCLT) approved Twin Star Technologies' Rs. 2,962 crore takeover proposal for the debt-ridden Videocon group's 13 companies.
The NCLT judgement was delayed by the appeal panel on 19 July in response to petitions filed by two unsatisfied Videocon Group creditors - Bank of Maharashtra and IFCI Ltd. - who requested that the "status quo ante" be maintained.
The NCLAT extended the stay earlier this week, on 7 September until 20 September the next day of hearing in the case. Dhoot has asked the NCLAT to set aside the order of the Mumbai Bench of the NCLT, where the Adjudicating Authority approved Twin Star Technologies' Rs.2,962 crore takeover proposal, and to instruct the lenders to consider an Rs. 31,789 crore settlement plan that he presented under section 12 of the Insolvency & Bankruptcy Code (IBC).
In the petition, Dhoot questions the Resolution Professional's involvement, claiming that he should have identified the Videocon Group's overseas oil and gas assets in the Information Memorandum (Tender Form) to all bidders, and hence no valuation was considered.
He also asked for the NCLT's order approving Twin Star Technologies' resolution plan to be revoked and a new resolution plan with Oil and Consumer Durable assets to be reviewed. All parties challenged Dhoot's assertions during the hearing, which took place on 10 September.
The Appellant (Dhoot) drove the firm to zero, according to Abhishek Manu Singhvi, Senior Counsel for Resolution Applicant (Twin Star), and whose motion under 12A of the Code was rejected by a very large majority of the CoC. The NCLT order stated, "Their proposal was for repayment in 15-20 years." While the CoC reported that Twin Star's proposal was approved with a 95% majority, it also stated that a small number of financial creditors, guarantors, and shareholders are attempting to have the approved Resolution Plan revoked.
The Tribunal can allow an ongoing insolvency process against a corporation to be withdrawn under Section 12A of the IBC if certain circumstances are met. The corporation files such an application with the consent of the Committee of Creditors, which has a 90% voting share.
A total of Rs. 64,838.63 crore allowed claims were filed by Videocon Industries and its 12 group entities. In a 47-page decision allowing Twin Star Technologies' Rs. 2,962.02 crore bid, the NCLT noted that creditors of debt-ridden Videocon Industries Ltd. will be getting a roughly 96% haircut on their loans, and the bidder is "paying almost nothing."
The NCLT had observed that the resolution plan is giving 99.28 per cent to the operational creditors, which it sarcastically hinted to be as a "Hair cut or Tonsure, Total Shave".
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