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NCLAT rejects Sebi plea against resolution plan of Assam Company


Press Trust of India New Delhi
The National Company Law Appellate Tribunal (NCLAT) has dismissed a plea by capital market regulator Sebi challenging the approval given by NCLT Guwahati to the resolution plan of Assam Company India Ltd.
A three-member bench headed by NCLAT Chairperson Justice S J Mukhopadhaya also gave a go ahead to the Securities and Exchange Board of India (Sebi) to take steps against promoters, directors or officials of Assam Company India if they are found violating listing laws.
Sebi had challenged the NCLT order of September 20, 2018, approving the resolution plan of Abu Dhabi-based BRS Ventures Investments for Assam Company. The resolution plan has provisions to delist Assam Company from National Stock Exchange and BSE.
The appellate tribunal ruled that the Sebi's appeal was "not maintainable" in the "absence of any violation of the provisions" of the Insolvency & Bankruptcy Code.
"We are not inclined to interfere with the impugned order of approval dated 20th September, 2018 passed by the NCLT Guwahati Bench," the NCLAT said.
"However, the order passed by the NCLT or this Appellate Tribunal will not come in the way of the SEBI or any competent authority to take steps against erstwhile Promoters, Directors or Officers or others, if any or all of them had violated any of the provisions under SEBI Act or rule framed thereunder or any other law as may be taken against such person of listed company."

Sebi had contended that on its direction a forensic investigation was going on against Assam Company which is alleged to be a shell company.
According to the market regulator, the approved resolution plan has denuding effect on its jurisdiction under the provisions of the Securities and Exchange Board of India Act, 1992 in an indirect manner.
Sebi has initiated inquiry against Assam Company after receiving a letter from the Ministry of Corporate Affairs (MCA) on June 9, 2017, forwarding Serious Fraud Investigation Office (SFIO) list of 331 shell companies.
Promoters had 41.27 per cent shareholding in Assam Company while the rest 58.73 per cent was owned by public shareholders, according to regulatory data for the quarter ending June 30, 2019,.
However, the NCLAT said that the investigation started against the Assam Company was challenged before the High Court of Guwahati, which on March 7, 2019, set aside the probe.
Moreover, the "interim order passed by Sebi does not amount to any existing law, to attract clause of Section 30(2) of the I&B Code, therefore, SEBI cannot take plea that the approved Resolution Plan is in contravention of any law for the time being in force."

"We hold that the appeal is not maintainable under Section 61(3) of the I&B Code as also on merit, in absence of any violation of the provisions of the Code or any existing law or material irregularity," said NCLAT.
According to reports, Assam Company deals in tea and coffee. The NCLT had initiated insolvency proceedings against the company over the plea filed by Srei Infrastructure Finance Ltd.

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First Published: Aug 30 2019 | 6:45 PM IST

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