23 August 2019: The overseas oilfield assets of Videocon group are caught in the crossfire as legal owner Videocon Oil Ventures and beneficial owner Videocon Industries are at odds over selling them, forcing the bankruptcy court to demand clarity on who gets to be the owner.
Videocon Industries had earlier this week requested the National Company Law Tribunal (NCLT) to include Videocon Energy Brazil Ltd and Videocon Indonesia Nunukan Inc in the ongoing corporate insolvency resolution process, after its lenders invited bids for these assets to recover part of their debt.
But VOVL has come out favouring sale of the assets, particularly the Indonesian asset in which an Indonesian government firm owns majority and Bharat Petroleum Corporation (BPCL) holds a minority stake.
“Contract pertains to Indonesia and now VIL is requesting the Indian jurisdiction to pass an order,” counsel representing VOVL and BPCL told the bankruptcy court. “If the order is passed in their favour, maybe BPCL being an Indian company may not have any rights over the assets, but the Indonesian company will not be bound by the order.”
If the assets are not sold, the share which would have otherwise come to the Indian company will go to an Indonesian firm, which puts more than Rs 100 crore of national money in jeopardy, the counsel said.
Videocon holds 23% stake in Videocon Indonesia Nunukan while BPCL’s Bharat PetroResources owns 12.5% and Pertamina Hulu Energi Offshore owns remaining stake.
Oil being a sovereign asset, it belongs to the government of Indonesia. When the RBI came out with a circular on February 12, 2018 prescribing rules for recognising one-day default by large corporates, VOVL had taken it to the Supreme Court.