Videocon Insolvency: Wisdom of creditors can't fluctuate, Twinstar tells SC

Appearing for Twinstar, Senior Advocate Abhishek Manu Singhvi said their bid for Videocon Industries Limited was approved by the CoC during the insolvency process of the group

The Supreme Court on Wednesday heard the appeal of Vedanta group’s Twinstar Technologies against the order of the National Company Law Appellate Tribunal (NCLAT).

Appearing for Twinstar, Senior Advocate Abhishek Manu Singhvi said their bid for Videocon Industries Limited was approved by the Committee of Creditors (CoC) during the insolvency process of the group and it was later approved by the National Company Law Tribunal (NCLT). 

However, after the decision of NCLT, the CoC, particularly some dissenting lenders led by the Bank of Maharashtra, backtracked on its approval of the bid, he said. Also, the NCLAT then ruled in favour of this and against the order of the NCLT.

He had, in an earlier hearing, told the court that the CoC had invited bids in Videocon after the NCLAT order. The NCLAT had set aside the approvals given for the company’s takeover of the Videocon group under the resolution process.

He recalled the court's earlier judgment which said the NCLT/NCLAT cannot interfere with the CoC’s commercial wisdom. “In this case, the CoC not only reviewed its commercial wisdom but reversed its own plan. The wisdom of the CoC cannot be fluctuating,” he told the bench of Justices Dinesh Maheshwari and Sudhanshu Dhulia. 

He also argued that the law gives little to no room for the CoC to go back on its resolution plan after it has been approved by the NCLT.

The apex court on February 14 this year issued notice to the parties on Twinstar’s appeal and said that it expects that there would be no fresh bids for Videocon until the matter was resolved. 

The value of the approved resolution plan was very close to the liquidation value of Videocon’s assets which led to the lenders challenging the bid. The haircut was more than 90 per cent, in this case, Singhvi told the court. 

He told the court that 13 companies under the Dhoots ran up 64,000 crore of debt and eleven offers had come for the resolution plan. Out of those, the bid for 3,000 crore was approved, he added.

The former promoter of the Videocon group, Venugopal Dhoot, had also challenged Twin Star’s resolution plan for being a very low bid. Dhoot wanted the NCLAT to consider his offer for reviving Videocon Group.

The court will hear the other side’s arguments at the next hearing on November 28.