5 July 2019: The National Company Law Appellate Tribunal has directed the National Company Law Tribunal to pass orders on consolidating the bankruptcy proceedings of Videocon group companies within three weeks.
The directive came after the State Bank of India claimed it has been waiting for requisite orders to kickstart the process, which has been held up for almost five months, according to a person familiar with the matter. SBI approached the NCLT last year to consolidate the bankruptcy proceedings of 15 Videocon group companies, against which separate petitions had been filed at various benches of the court.
The state-run lender had argued that consolidation would lead to a speedier resolution process for the companies, which have inter-connected operations. It had requested that a single resolution professional be appointed to manage the bankruptcy process for all the companies.
The NCLT heard arguments from all parties, including Videocon’s promoter Venugopal Dhoot, and reserved its orders on January 25, after which the bankruptcy process has been stalled.
SBI then approached the NCLAT to expedite the process. The Videocon group companies owe Rs 20,000 crore to a group of banks led by SBI.
Infotel Business Solutions, a creditor to one of the companies, opposed the proposed consolidation, ET reported on March 15.
New Delhi-based businessman Mahendra Nahata is a major shareholder of Infotel Business Solutions. Nahata had sold his company Infotel Broadband to Reliance Industries in 2010. That company has morphed into present-day Reliance Jio Infocomm.
SBI did not immediately respond to a request for comment.
The bank has carried out a fresh exercise for the appointment of one resolution professional to oversee the bankruptcy process. It has interviewed candidates from several firms after sending out requests for proposals. Five such professionals — Anuj Jain, Mahendra Khandelwal, Divyesh Desai, Dushyant Dave and Avil Menezes — are currently tasked with overseeing the insolvency process for the 15 Videocon companies.
The units that have been taken to the bankruptcy court are engaged in the manufacturing of consumer electronics and home appliances.
The lenders have received feelers from a clutch of possible suitors, including Chinese electronics major Haier, private equity firm Blackstone and investment banking giant Goldman Sachs, to purchase the business, according to a banker.
Though the manufacturing plants are only partially operational, they can swing to full capacity with an infusion of about Rs 500 crore of cash, a person aware of the matter told ET in September.
Dhoot, who is currently under scrutiny of the Enforcement Directorate for granting favours to ICICI Bank’s former CEO Chanda Kochhar’s husband in return for loans to the Videocon group companies, also faces the prospect of losing his oil exploration business, the credit profile of which is being closely monitored by Videocon’s lenders.