NCLAT sets aside Videocon’s sale to Twin Star

The National Company Law Appellate Tribunal (NCLAT) on 5 January 2022 set aside the Mumbai bench of National Company Law Tribunal (NCLT) order, approving the resolution plan of Videocon Group by Twin Star Technologies. In June 2021, the Mumbai bench of NCLT approved the resolution plan of Twin Star Technologies for the Videocon group. But it had pointed out that the successful resolution applicant is “paying almost nothing” as the amount offered is only 4.15 per cent of total outstanding claim. Bank of Maharashtra supported by assenting creditors, appealed against the NCLT order in NCLAT in July 2021, following which the appellate tribunal stayed the NCLT order. The assenting financial creditors said that they feel duty bound to reconsider their decision in larger public interest resulting from an unprecedented haircut of 95 per cent and observations of the adjudicating authority (NCLT) as also this appellate tribunal while granting interim stay. The appellate tribunal said that the committee of creditors (CoC) has the authority to review its decision. It also mentioned that NCLT failed to consider the contentions of the appellant (Bank of Maharashtra), as a result of which the order is ex-facie illegal and contrary to the settled provisions of the code and the regulations framed thereunder. The appellate court has remitted the matter back to Videocon’s committee of creditors for completion of corporate insolvency resolution process in accordance with the insolvency and bankruptcy code (IBC).

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