NCLT orders attachment of Venugopal Dhoot’s properties with immediate effect

The Mumbai bench of the National Company Law Tribunal (NCLT) today issued directions for attachment of assets belonging to Videocon Industries promoter Venugopal Dhoot in response to the Ministry of Corporate Affairs’ petition against the company under the Companies Act, 2013. The tribunal has ordered the concerned authorities to freeze movable and immovable properties, bank accounts, and Demat accounts, among others belonging to Dhoot.
 
The tribunal has also issued directions to the Central Board of Direct Taxes (CBDT) and the Indian Banking Association to identify such assets and properties belonging to the beleaguered promoter of the Videocon Industries, which has been under corporate insolvency resolution process for more than three years now.
 
It may be noted that in the Videocon insolvency issue, the banks have taken over 95% haircut with receivables worth merely Rs 2,962 cr against a whopping default of Rs 62,000 crore. Amid this backdrop, the ministry approached the NCLT to restrain the former promoters from selling or creating third party rights on their personal assets in a move aimed at enhancing the recovery for the banks in the ongoing insolvency resolution process.
 
In an order issued today after hearing the petition filed by the ministry of corporate affairs under section 241 and 242 of the Companies Act, NCLT directed Dhoot and other respondents in the matter to immediately disclose all movable and immovable properties, assets, including banks accounts owned by them in India and abroad.
 
The order pronounced, “That all movable and immovable properties of Respondent No. 2 to 6 (Venugopal Dhoot and others) including bank accounts, lockers, Demat accounts including jointly held properties be attached during the pendency of the company petition.”
 
It also directed the banks, tax authorities and depositories to facilitate in identifying and freezing such properties.
 
“Central Depository Services Ltd and National Securities Depository Ltd is directed that securities owned/held by the respondents (except companies) in any company/society be frozen, and be prohibited from being transferred or alienation and details thereof be shared with the petitioner,” NCLT said in the ruling.
 
“The CBDT is directed to disclose information about all assets of the Respondents (except companies) in their knowledge or possession, for the purpose of freezing and restrain on alienation of such assets,” the ruling said.
 
The Indian Banks Association (IBA) is directed to facilitate disclosure of the details of the bank accounts, lockers owned by the respondents and such bank accounts and lockers also be frozen with immediate effect, NCLT said adding that the properties will remain attached till the pendency of the company petition.   
 
The MCA plea is being supported by the public sector banks in the committee of creditors. Appearing on behalf of State Bank of India – the lead lender with 18% exposure – Bishwajit Dubey, partner, Cyril Amarchand Mangaldas told the tribunal that the bank was in support of the petition filed by the union government. Meanwhile, during the hearing, the Mumbai NCLT denied the counsel of one of the group companies more time to file a reply on the matter.
 
The ministry of corporate affairs moved the National Company Law Tribunal (NCLT), Mumbai, under Section 241& 242 of the Companies Act, 2013, which  
empowers the central government to move against a company if its affairs are seen as prejudicial to the interests of the public at large.
 
In June this year, NCLT approved Twin Star Technology Ltd's offer for Videocon Industries Ltd, resulting in an almost 95% haircut for lenders against approved claims of about Rs 62,000 cr. TSTL is a fully owned subsidiary of Anil Agarwal's Vedanta Group. Several small banks challenged the approval of the resolution plan in the appellate tribunal which put a stay on the plan last month against which TSTL moved the Supreme Court.
 
While hearing the matter, the Supreme Court referred the matter back to the appellate tribunal observing that taking over of the case by the apex court will only delay the matter, which has been pending with the corporate law court for over three years now.  
 
It may be noted that Dhoot has also petitioned the NCLAT to direct lenders to consider a resolution offer worth Rs 31,789 crore proposed by him under section 12A of the Insolvency and Bankruptcy Code. With the attachment order on Dhoot’s properties now, his plans to gain control of the company with an offer to the committee of creditors may now not fructify till the pendency of the MCA plea.

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