The National Company Law Tribunal (NCLT) has admitted the insolvency petition filed by State Bank of India (SBI) against Videocon Telecommunications Ltd. This is the second firm promoted by Venugopal Dhoot to be admitted to the insolvency resolution process after the flagship company Videocon Industries.
On Friday, the division bench of NCLT Mumbai, presided over by B.S.V. Prakash Kumar and Ravikumar Duraisamy, admitted the petition by the country’s largest lender and also approved Anuj Jain as the interim resolution professional (IRP).
Animesh Bisht, counsel for the bank, argued that the company had defaulted in the payment of ₹ 234 crore to SBI and three of its associate banks (now merged with SBI). Of this, Videocon Telecommunications owes ₹ 193 crore to SBI alone in principal and interest.
A consortium of 18 banks has an exposure of ₹ 1,700 crore to Videocon Telecommunications, which defaulted on loans and bank guarantees in January 2018.
Zal Andhyarujina, counsel for Videocon Telecommunications, argued that the bank’s petition is defective, as it has not furnished the record of default by the company and that it should be dismissed on technical grounds. “The debt that is claimed by the bank is not the debt at all," he said. “No notice was given to the company regarding the default and there was no crystallization of the dues by the bank."
On Wednesday, NCLT admitted Videocon Industries’ case, also approving Jain as IRP. In February, Videocon had filed a writ petition in the Bombay high court asking for a stay on bankruptcy proceedings initiated by SBI in NCLT. It had moved the high court against the Reserve Bank of India’s decision not to extend the timeline as requested by SBI and the Joint Lenders’ Forum to rerate Videocon’s restructuring proposal following changes in cash flows after subsequent changes in the import duty policy.
As per Videocon’s FY17 annual report, it is liable to repay the liability of other group firms to the extent of ₹ 5,082 crore as of 31 March 2017. Its total debt was ₹ 19,506 crore as of March last year.