The National Company Law Tribunal (NCLT) on Thursday approved the consolidation of the insolvency resolution process of 13 out of 15 Videocon Group companies. The written order for the same was uploaded on Friday.
The case was heard by a one-member bench of the Mumbai NCLT, presided by MK Shrawat, and marks the first instance of consolidation of proceedings against group companies that have been entertained under India’s Insolvency and Bankruptcy Code. Videocon Industries, Videocon Telecommunications, Century Appliances, PE Electronics, CE India and Sky Appliances are among the 13 group companies where the CIRP (Corporate Insolvency Resolution Process) has been consolidated.
The tribunal also appointed three interim resolution professionals to oversee the corporate insolvency resolution process for the group cases. Mahender Khandelwal has been appointed for the consolidated cases, while Avil Menezes is the IRP for KAIL, and Divyesh Desai has been appointed for Trend Electronics. The order further stated that for the purpose of calculation of 180-day deadline for resolution of the stressed assets, as stated in the IBC, the tribunal decided to exclude the period of litigation, instead directing that the CIRP be completed within 180 days from the date of the order.
The order further stated, “The appointed IRP is, hereby, directed that in case of the 13 Corporate Debtors, listed above, consolidation is now approved, therefore, on the basis of the consolidated Balance Sheet of the group drawn as on 31.03.2017, directed to be updated as on 31.03.2018 and thereupon Information Memorandum is to be prepared at an early date, so that urgently Expression of Interest can be invited.”
The tribunal chose to leave out two Videocon Group entities – KAIL and Trend Electronics – from the scope of consolidation. The tribunal noted that although in all 15 cases, the accounts are intermingled, for the purposes of carrying on business, the above mentioned companies are not inter-dependent. Hence, it concluded that that consolidation would neither be beneficial nor advisable.
The Mumbai bench of the NCLT heard arguments on the need for consolidation of the resolution proceedings after the Delhi bench allowed a plea filed by promoter Venugopal Dhoot in late 2018 seeking to consolidate proceedings against Videocon Group entities. A similar application was also filed by the State Bank of India before the Principal Bench seeking the same reliefs.―Financial Express