Venugopal Dhoot moves NCLAT against Anil Agarwal's Twin Star takeover bid for Videocon group

Venugopal Dhoot, Videocon Group, national company law appellate tribunal, Insolvency & Bankruptcy Code, Videocon Industries Ltd, Twin Star Technologies

Venugopal Dhoot, former promoter of Videocon Group, has moved before the NCLAT, challenging an order of the insolvency court NCLT approving Rs 2,962 crore takeover bid by Anil Agarwal’s Twin Star Technologies for 13 companies of the debt-ridden group.

Dhoot, in his petition filed before the National Company Law Appellate Tribunal (NCLAT) has requested to set aside the order passed by the Mumbai bench of the NCLT and to direct the lenders to consider Rs 31,789 crore settlement plan submitted by him under section 12 of the Insolvency & Bankruptcy Code (IBC).

In the petition, he has questioned the role played by the Resolution Professional and said that he should have mentioned the foreign oil and gas assets of Videocon Group in the information memorandum (Tender Form) to all the bidders and hence no valuation was considered.

“All assets owned by Videocon Group, particularly oil and gas assets owned by Videocon Industries are not included in Information Memorandum and no valuation thereof has been considered,” he said, adding RP and lenders “were wrong to ignore order of NCLT to treat and include foreign oil and gas assets of Videocon as assets of Videocon Industries Ltd”.

Dhoot has requested NCLT’s order approving Twin Star Technologies’ resolution plan to be cancelled and fresh resolution plan to be considered with Oil and Consumer Durable assets.

“Set aside the Impugned Order dated June 8, 2021 passed by the NCLT and the Respondents (RP & CoC) be ordered to issue fresh IM (Information memorandum -Tender Form )and call for fresh EOI/Resolution Plan for all assets of Videocon group including all foreign oil and gas assets of Videocon group,” Dhoot submitted.

While Anil Agarwal-led Vedanta Group has picked up Videocon Industries for Rs 2,962 crore, the bids for overseas assets are yet to be decided.

Besides, Dhoot also said it needs to be considered as to “whether RP or any other person acting on his behalf has managed the liquidation value and whether the confidentiality has been maintained or it has been leaked to Respondent No 3 (Twin Star Technologies)?”

According to Dhoot, the lenders rejected his proposal to pay Rs 31,789 crore to settle their outstanding loans and pull out 13 Videocon group companies from the insolvency proceedings.

“It is submitted that a similar proposal was submitted by Appellant in the CIRP of Corporate Debtor under Section 12A of the Code, however, the CoC being unbending and irrational has rejected the proposal of Appellant to the tune of Rs 31,789 crore and has accepted the Resolution Plan of Twin Star which provides payment of only Rs 2,962 crore,” Dhoot said in the petition.

According to him, “the Commercial wisdom exercised by CoC is arbitrary and irrational and does not reflect any applicability of mind by rejecting a proposal of Appellant which was 10 times higher and submitted at an early stage of the process.”

Under Section 12A of the IBC, the tribunal can permit withdrawal of an ongoing insolvency process against a company subject to certain conditions. Such application is filed by the company with the approval of 90 per cent voting share of the committee of creditors.

In several high profile corporate insolvency resolution cases such as Essar Steel and DHFL, 12A plea has been rejected.

Earlier on July 19, NCLAT had stayed Rs 2,962 crore takeover bid by Anil Agarwal’s Twin Star Technologies for Videocon Industries group over the plea filed by two dissented creditors – Bank of Maharashtra and IFCI Ltd.

Moreover, NCLT had conducted consolidated resolution process of 13 Videocon group firms for maximisation of the value, which “has not been achieved rather compromised on the face of it.”

The appellate tribunal had stayed the order passed by the Mumbai bench of the National Company Law Tribunal (NCLT) on June 9 and directed to maintain “status quo ante” as before passing of the order, till the next date of hearing.

NCLAT had also directed the RP to continue to manage the Videocon Group companies as per provisions of IBC till the next date.

Earlier, in its 47-page-long judgement, NCLT while approving Anil Agarwal’s Twin Star Technologies’ Rs 2,962.02 crore-bid had observed creditors of debt-ridden Videocon Industries Ltd will be taking nearly 96 per cent haircut on their loans and the bidder is “paying almost nothing”.

The NCLT had observed that the resolution plan is giving 99.28 per cent to the operational creditors, which it sarcastically hinted to be as a “Hair cut or Tonsure, Total Shave”.

It has requested the Committee of Creditors (CoC) and Twin Star Technologies to increase the pay-out amount to these Operational Creditors as they are getting only 0.72 per cent of their admitted claim amount.

Videocon Industries and its 12 group companies had a total admitted claims of Rs 64,838.63 crores.

NCLT had also said a “doubt arises upon the confidentiality” over the liquidation valuation of the assets of the Videocon Industries during the insolvency process as Anil Agarwal’s Twin Star Technologies, the successful bidder, also “arrived at almost the same value”.

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