Mumbai: The National Company Law Tribunal (NCLT) on Wednesday admitted the insolvency plea filed by the State Bank of India (SBI) against Videocon Industries Ltd, controlled by Venugopal Dhoot.
The single bench of NCLT presided over by M.K. Shrawat ruled in an oral order that the insolvency petition is fit for admission.
The tribunal has also approved the name of Anuj Jain as interim resolution professional (IRP) to conduct the corporate insolvency resolution process (CIRP) of the company.
On 28 April, the Mumbai bench of NCLT rejected an intervention sought by Videocon against SBI amending its original bankruptcy petition.
Aurangabad-based Videocon had alleged that in the guise of minor changes, SBI made several changes to the original petition. This meant that the original plea was defective and needed to be rejected.
The tribunal had, however, rejected the intervention and said that the petition will be heard on its merits.
The country’s largest bank, SBI, had filed its insolvency petition against Videocon in January at NCLT. Videocon is in the so-called second list of 28 defaulters that the Reserve Bank of India (RBI) had directed for resolution under the new bankruptcy code.
In February, Videocon had also filed a writ petition in Bombay high court asking for a stay on bankruptcy proceedings initiated by SBI in NCLT. Videocon had moved the high court against RBI’s decision not to extend the timeline as requested by SBI and the Joint Lenders’ Forum to re-rate Videocon’s restructuring proposal following changes in cash flows after subsequent changes in government import duty policy.
According to Videocon’s FY17 annual report, the company is liable to repay the liability of other group companies to the extent of ₹ 5,082 crore as on 31 March 2017. The company’s total debt stood at ₹ 19,506 crore as of March last year.
On the day of admission of the insolvency petition, the company’s share fell 4.73% to ₹ 9.07.
The development comes at a time when markets regulator Securities and Exchange Board of India (Sebi) has started proceedings against ICICI Bank Ltd for non-disclosure of information in the matter of alleged conflict of interest in the grant of loans to Videocon group.
On 25 May, the bank had informed the stock exchanges that the Sebi has sent the bank and Chanda Kochhar, its managing director and CEO, a notice alleging violation of Listing Obligation and Disclosure Requirements and for not making adequate disclosures.