Venugopal Dhoot moves NCLAT to set aside NCLT order on Videocon

He accuses resolution professional of eroding the value of the company by closing it down

Videocon Group chairman Venugopal Dhoot. File

Former promoter and chairman of the Videocon Group, Venugopal Dhoot, has moved the National Company Law Appellate Tribunal (NCLAT) against the June 8, 2021 order of the National Company Law Tribunal (NCLT) Mumbai approving the bid of Vedanta Group company Twinstar Technologies Limited to acquire the bankrupt Videocon Industries Limited for ₹2,962 crore.

Mr. Dhoot has petitioned NCLAT to set aside the ‘Resolution Plan’ approved by the NCLT and to direct the Committee of Creditors to consider the ‘Resolution Plan’ submitted by him under Section 12A of the Insolvency and Bankruptcy Code (IBC) that entails a “zero haircut” (involving no loss to the banks/ creditors).

Accusing the resolution professional of withholding information in the tender form and eroding the value of the company by closing it down, Mr. Dhoot said in his petition that the resolution professional had violated Sections 30(2) and 61(3)(ii) of the IBC.

He said the decision to separate the oil assets and the consumer durable assets of the company had led to minuscule price realisation from the bidding process, which he now wants scrapped.

“The liquidation value of these oil assets is not less than ₹15,000 crore. As such RP (resolution professional)/ COC (committee of creditors) has no authority to sell oil assets and consumer durables separately. If the RP had sold oil and consumer durables together, he would have got minimum of ₹25,000 crore against loan of ₹49,000 crore (₹29,000 crore of consumer durables business and ₹20,000 crore of oil assets),” he said.

“Thus recovery would have been around 50% and not 5% as seen today,” he added.

The NCLT had in June, in a verbal order, accepted the bid of Twin Star Technologies Ltd. for Videocon Industries Ltd. and 12 other group companies, leading to a steep haircut for lenders who had a collective exposure of ₹43,743 crore.

Vedanta’s Volcan Investments had informed the London Stock Exchange that the group’s interest in the Ravva oilfield would rise to 47.5% after the acquisition of Videocon Industries Ltd.