Videocon Group Promoter Venugopal Dhoot Moves NCLAT Against Twin Star Order
- ByAyushi Ray | August 2, 2021
Videocon group promoter Venugopal Dhoot moves NCLAT against Twin Star order. He approached an appeals court against a June insolvency tribunal order that cleared the resolution plan of Vedanta group firm, the parent company of Twin Star. Dhoot listed three respondents in his petition filed at the National Company Law Appellate Tribunal (NCLAT) on Saturday—Videocon Group resolution professional Abhijit Guhathakurta, the committee of creditors (CoC) and Twin Star Technologies. When voting was done in December, over 95% of lenders backed Twin Star’s ₹2,900 crore plan for 13 Videocon firms, while the rest dissented or abstained. This meant that the 13 companies owe ₹61,773 crore to financial creditors. State Bank of India received the highest voting share of 18.05% in the CoC, followed by IDBI Bank at 16.06% and Union Bank of India at 9.07%.According to the petition, the process undertaken by the resolution professional suffers from “material irregularity” as all assets have not been included in the information memorandum. Further, the resolution plan of Twin Star is against the objective of the Insolvency and Bankruptcy Code (IBC), Dhoot alleged.
He said the commercial wisdom exercised by lenders is “arbitrary and irrational and does not reflect any applicability of mind by rejecting a proposal which was 10 times higher and submitted at an earlier stage”. Dhoot requested NCLAT to set aside the June order of the Mumbai National Company Law Tribunal (NCLT) and requested they should allow fresh resolution plans to seek for all assets of the group, including all foreign oil and gas assets. The petition said NCLAT could also direct lenders to reconsider Dhoot’s proposal under Section 12A of the IBC and approve it.When, Dhoot submitted a proposal to repay ₹31,789 crore, in October, it was rejected by lenders. According to Section 29A of IBC, defaulting promoters are not allowed to gain control of their firms. If the creditors would have considered the offer, from a default promoter, they would have had to seek withdrawal of the firm from IBC under Section 12A of the code.
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