The Appellate Tribunal issued the order observing that the transaction was not in compliance with the Insolvency and Bankruptcy Code (IBC). The order was in an appeal filed last year by Bank of Maharashtra, SIDBI and IFCI which were disgruntled creditors. The resolution plan had become controversial and received sharp comments from NCLT as the bid was close to the liquidation price and involved 95% write-off. The NCLT had approved the order in June 2021 stating that the successful bidder was “paying almost nothing” and indicated that there appeared to be a breach of confidentiality clause.
A banker told TOI that the Vedanta resolution plan was as good as the lenders themselves had sought re-bids. SBI, the largest financial creditor, had in September 2021 sought re-bids from the appellate tribunal. SBI, which has around 18% vote share, had cited the observations made in the NCLT order on haircut of various classes of creditors.
In July 2021, the NCLAT prohibited the sale of group companies twinstar, Disgruntled creditors objected to the deal, saying that the lenders were getting less than 5% of the accepted claims and that even this meager amount was not being paid in advance, but on a large scale. Less cash was coming in the form of debentures.
Even though the NCLAT had stayed Twinstar’s bid, the Ministry of Corporate Affairs filed a petition in the NCLT for attachment of the assets of the promoters of Videocon to enhance the recovery in the case. In August 2021, the NCLT issued an order freezing and attaching the assets and properties of the promoters of Videocon. The tribunal also directed the Central Board of Direct Taxes (CBDT) to disclose information about all properties of the promoters of Videocon so that such properties can be frozen and banned. It also asked banks to give details of their bank and depository accounts and lockers.
Metal magnate Anil Agarwal’s Vedanta Group has big plans for the electronics segment – where most Indian big names have gone out of business. The company had earlier announced plans to set up a flat screen manufacturing facility in India Twinstar Display Technologies, More recently, the company has talked about investing in a chip fabrication facility in the country.
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