In a significant order, the Mumbai bench of the National Company Law Tribunal (NCLT) has asked the authorities to freeze the assets of Videocon group's erstwhile promoters, including Venugopal Dhoot, his brother Pradipkumar Dhoot, son Anirudh and other former key managerial personnel (KMP). NCLT has also asked these promoters and KMPs to disclose all movable and immovable properties and bank accounts belonging to the group in India and abroad.
The NCLT asked several entities, including 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), to name the assets of the Videocon group under their watch and for them to be frozen with immediate effect for using them for the recovery of dues.
The ministry of corporate affairs (MCA) has filed a petition before the Mumbai bench of NCLT under Sections 241 and 242 of the Companies Act. The Section empowers the central government to move against a company if its affairs are seen as prejudicial to the interests of the public at large.
Apart from Videocon Industries Ltd, the ministry has also made several other companies parties in the case. This includes Sky Appliances Ltd, Value Industries Ltd, Evans Fraser and Co (India) Ltd, Ce India Ltd, Century Appliances Ltd, Videocon Telecommunication Ltd and Millennium Appliances India Ltd.
In its order, the division bench of Bhaskara Pantula Mohan and Narender Kumar Bhola says, "Unless it is properly investigated as to how the loans were arranged by the corporate debtors, the fraud will not be completely unearthed. A copy of this order may also be shared with the director, serious fraud investigation office (SFIO), who is already investigating the corporate debtors.”
At present, Videocon is managed by the resolution professional (RP) as the company is undergoing a corporate insolvency resolution process (CIRP).
In June this year, the NCLT had approved the resolution plan of Twin Star Technologies, a Vedanta group company, to acquire the bankrupt Videocon Industries. As per the resolution plan, the equity shares of the company would be delisted. Twin Star will pay Rs3,000 crore, and the additional Rs500 crore cash, lying with the company, will also be given to the banks.
While approving the resolution plan, the Mumbai bench of NCLT noted the huge haircut the lenders had taken and commented that the Vedanta group company had paid 'almost nothing' to take over Videocon Industries.
Last month, Mr Dhoot, former promoter of Videocon, moved the National Company Law Appellate Tribunal (NCLAT) against NCLT's approval to the bid of Twin Star Technologies Ltd for Videocon Industries.
Along with the plea to set aside the resolution plan of Vedanta group firm Twin Star, Mr Dhoot had also urged the appellate tribunal to direct the committee of creditors (CoC) to consider his resolution plan, which entails 'zero haircut', under Section 12A of the Insolvency and Bankruptcy Code (IBC).
In his plea before the NCLAT, Mr Dhoot had contended that the appellant submitted a similar proposal in the CIRP of the corporate debtor under Section 12A of the Code; however, "the CoC, being unbending and irrational, has rejected the proposal of the appellant to the tune of Rs31,789 crore, and has accepted the resolution plan of Twin Star, which provides payment of only Rs2,962 crore."
On 19 July 2021, the bench headed by the officiating NCLAT chairman Ashok Iqbal Singh Cheema stayed Vedanta group's winning bid while hearing an appeal by dissenting creditors, including Bank of Maharashtra and IFCI, who were unhappy with the value realised through the resolution.