NCLT Mumbai orders freeze of Videocon group promoters' assets

It has directed the erstwhile promoters of Videocon group to disclose in an affidavit their moveable and immovable properties/assets

The Mumbai bench of the National Company Law Tribunal (NCLT) on Tuesday directed the erstwhile promoters of Videocon group to disclose in an affidavit their moveable and immovable properties/assets, including bank accounts, owned by them in India or anywhere in the world.
 
In an order, the NCLT said, the Central Depository Services Ltd. (CDSL) and National Securities Depository Ltd. (NSDL) is directed that securities owned/ held by the respondents (except companies) in any company/society be frozen, and be prohibited from being transferred or alienation and details thereof be shared with the Petitioner (union government).
 
It has also asked the Central Board of Direct Taxes (CBDT) to disclose information about all assets of the respondents (except companies) in their knowledge or possession, for the purpose of freezing and restrain on alienation of such assets.
 
The tribunal has asked the Indian Banks Association (IBA) to disclose the details of the bank accounts, lockers owned by the respondents (except companies) and such bank accounts and lockers and such accounts and lockers should be frozen with immediate effect.
 
Further, it has said that all movable and immovable properties of the respondents (except companies) including bank accounts, lockers, demat accounts including jointly held properties be attached during the pendency of the company petition.
 
The matter has now been adjourned to September 22.
 
“We direct the petitioners to use all the powers available with it to extend their long arm to thoroughly investigate the affairs of the companies in all the above-mentioned company petitions and others. Unless it is properly investigated as to how the loans were arranged by the corporate debtors the fraud will not be completely be unearthed that a copy of this order may also be shared with Director, SFIO who is already investigating the corporate debtor”, the bench presided over by Bhaskar Pantula Mohan and Narender Kumar Bhola said in the order.
 
The ministry of corporate affairs had moved a company petition under Section 241-242 of the Companies Act, 2013 against Videocon Industries, its promoters. It has also 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 parties in the case.
 
In its order, the NCLT bench said that it was surprised with the manner in which banks came forward to grant loans to a sinking ship like Videocon. The lenders even agreed to take a 95 per cent hair cut while agreeing to a debt resolution plan by Vedanta group.
 
It is important to note that NCLT had approved a resolution for Videocon Group by Twin Star Technologies -- a promoter entity of the Vedanta Resources group. However, it had noted that the successful resolution applicant is "paying almost nothing" as the amount offered is only 4.15 per cent of total outstanding claim. It noted the hair cut for all the creditors is 95.85 per cent and suggested to both committee of creditors (CoC) and the successful applicant an increase in the payout.