Videocon Group promoter Venugopal Dhoot approached an appeals court against a June insolvency tribunal order that cleared the resolution plan of Vedanta group firm Twin Star Technologies.
Dhoot listed three respondents in his petition filed at the National Company Law Appellate Tribunal (NCLAT) on Saturday — Videocon Group resolution professional Abhijit Guhathakurta, the committee of creditors (CoC) and Twin Star Technologies. A copy of the petition has been reviewed by Mint.
At a December vote, over 95% of lenders backed Twin Star’s ₹2,900 crore plan for 13 Videocon firms, while the rest dissented or abstained.
This implied a 95% haircut — the 13 companies owe ₹61,773 crore to financial creditors. State Bank of India (SBI) has the highest voting share of 18.05% in the CoC, followed by IDBI Bank at 16.06% and Union Bank of India at 9.07%.According to the petition, the process undertaken by the resolution professional suffers from “material irregularity” as all assets have not been included in the information memorandum. Further, the resolution plan of Twin Star is against the objective of the Insolvency and Bankruptcy Code (IBC), Dhoot alleged.
He said the commercial wisdom exercised by lenders is “arbitrary and irrational and does not reflect any applicability of mind by rejecting a proposal which was 10 times higher and submitted at an earlier stage”.
Dhoot requested that NCLAT set aside the June order of the Mumbai National Company Law Tribunal (NCLT) and allow seeking of fresh resolution plans for all assets of the group, including all foreign oil and gas assets. The petition said NCLAT could also direct lenders to reconsider Dhoot’s proposal under Section 12A of the IBC and approve it.
In October, Dhoot submitted a proposal to repay ₹31,789 crore, but this was rejected by lenders. Section 29A of IBC disallows defaulting promoters from gaining control of their firms. To consider a defaulting promoter’s offer, creditors would have had to seek withdrawal of the firm from IBC under Section 12A of the code. “NCLT, while approving the resolution plan, has re-written the provisions of code by sending the resolution plan back to CoC after approving the same. Such recourse is against the provisions and objective of the code,” the petition said.
The resolution plan of Twin Star, it said, is an example of failed legislation by not setting any benchmark or test in the exercise of an “arbitrary and irrational” decision by CoC.
“CoC has not shown any commercial wisdom while approving the resolution plan. Rather, the approval of the resolution plan smacks of mala fide and done for oblique purpose as the proposal submitted by appellant (Dhoot) was 10 times higher than the total amount offered by respondent number three (Twin Star) in its resolution plan,” it said.