On 31 August the National Company Law Tribunal (NCLT) in Mumbai ordered former Videocon Group promoters Venugopal Dhoot, his brother Pradipkumar Dhoot, son Anirudh, and other former key managerial staff (KMP) to file an affidavit listing their moveable and immovable possessions.
On a plea filed by the Ministry of Corporate Affairs (MCA) under Sections 241, 242 and 246 of the Companies Act, 2013, the NCLT has given a decision. These parts of the Companies Act deal with a company's mismanagement.
During the pendency of the petition, all assets, including bank accounts, lockers, and DEMAT accounts, as well as jointly held properties, would be attached, according to the ruling.
The Mumbai Bench of the National Company Law Tribunal (NCLT) on Tuesday ordered the Videocon group’s bank accounts frozen and properties attached following a petition by the Ministry of Corporate Affairs.
In an order issued late in the evening, the Tribunal has asked the promoter, Venugopal Dhoot, to disclose the moveable and immovable properties and bank accounts belonging to the group in India and abroad. The court has also directed the Central Depository Services Ltd (CSDL), National Securities Depository Ltd (NSDL), Central Board of Direct Taxes (CBDT), Reserve Bank of India (RBI) and Indian Banks’ Association (IBA) among others to name the Videocon assets under their watch and for them to be frozen with immediate effect in order to be used for recovery of dues.
The Ministry had approached the Mumbai Bench against Venugopal Dhoot and other former directors and senior officials of Videocon Industries Ltd under Section 241 and 242 of the Companies Act that deals with oppression and mismanagement in the company.
In a 23-page ruling, the Division Bench of Bhaskara Pantula Mohan and Narender Kumar Bhola said, "We direct the Petitioners to use all the powers available to them to extend their long arm to thoroughly investigate the affairs of the companies in all the above-mentioned petitions and others." “Unless the loans were properly arranged by the corporate debtors, the fraud will not be completely unearthed,” the order states. “A copy of this order may also be shared with Director, SFIO, who is already investigating the corporate debtors.”
The NCLT has adjourned the case to 22 September. The MCA is being used by the central government to gain an order from the tribunal to seize assets and disgorge money from the Videocon Group's former promoters.
The Court noted that the reserves and surpluses of Videocon Industries, as declared in the financial statements in 2014, stood at ₹10,028.09 crore and for the fiscal year 2019 at ₹2,972.73 crore, showing a steep fall in just five years. During the same period, secured loans rose from ₹20,149.23 crore to ₹28,586.87 crore.
“The Bench is surprised with the manner in which the financial institution has come forward to grant loans to a sinking ship and again come forward to file a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) and again supports this petition. This certainly raises the eyebrows of the common man in the public,” read the order.
The order said that transaction audit reports also reveal fraudulent transactions by the promoters.
Twin Star Technologies, a firm held by Volcan Investments, a corporation controlled by Vedanta Group's Anil Agarwal, had its resolution plan accepted by the NCLT on 8 June.
The NCLT-approved resolution plan from the Vedanta Group entity was for a little over Rs3,000 crore against admitted financial claims of Rs 61,773 crore.
After hearing appeals filed by two dissenting financial creditors, the Bank of Maharashtra and IFCI, the appellate tribunal temporarily delayed the NCLT's ruling on 19 July
The latest order by the NCLT has put further roadblocks on the potential transaction between Anil Agarwal-backed Twin Star Technologies and VIL.
Comments