Bank of Maharashtra raises issue of breach of confidentiality in Videocon insolvency process
New Delhi: Bank of Maharashtra, a dissatisfied creditor of the Videocon group, on Friday raised the issue of the breach of confidentiality in the insolvency resolution process of the companies of the debt-ridden group before the National Company Law Appeals Tribunal (NCLAT).
During the proceedings, counsel for the Bank of Maharashtra wondered how the amount of the successful resolution plaintiff Twin Star Technologies’ bid came so close to the liquidation value.
âHere, the type of offer that has come so close to liquidation value clearly suggests that confidentiality has not been maintained. Over 95 percent of the proceeds are returned to secured creditors (depending on the plan) due of the leakage of this (liquidation) value for bidders, âsubmitted lead lawyer Vikas Singh appearing for the Bank of Maharashtra.
Singh also said that the resolution plan provides for payment to dissident financial creditors through non-convertible bonds (NCDs) and shares, which is contrary to the rules set out in the Insolvency and Bankruptcy Code ( IBC).
Twin Star’s resolution plan of ??2,962.02 crore meant a haircut of more than 95 percent on the admitted claims of ??64,838.63 crores.
Even NCLT’s Mumbai bench, while endorsing Anil Agarwal’s Twin Star Technologies’ ??2,962.02 crore-bid had observed that the creditors of the debt-ridden Videocon Industries Ltd would take a discount of almost 96% on their loans and the bidder “pays next to nothing”.
NCLAT will continue to hear the case on Friday as well.
During the proceedings, Solicitor General Tushar Mehta representing the Creditors Committee argued that due to lack of time, a reply to the response filed by the Twin Star could not be filed. It has been assured to be deposited by Friday in physical form.
“In the meantime, the parties, who have not yet filed ‘written submissions’, are urged to positively file them by tomorrow in physical form,” said a two-member bench including Judge Jarat Kumar Jain and Ashok. Kumar Mishra.
Earlier on June 9, the Mumbai chamber of the National Company Law Tribunal (NCLT) approved a ??Takeover bid of 2,962 crore by Twin Star Technologies for the 13 companies of the debt-ridden group.
However, the NCLT order was stayed by the appeals court on July 19 following petitions filed by two disgruntled creditors of the Videocon group – Bank of Maharashtra and IFCI Ltd and ordered to maintain the “status quo ante”.
Later, Videocon Industries’ lenders also approached the insolvency appeals court for new offers for the 13 companies in the debt-ridden group.
This story was posted from an agency feed with no text editing. Only the title has been changed.
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