MUMBAI: In a fresh twist in the Videocon case, the National Company Law Tribunal (NCLT) has ordered a countrywide search and freeze of the assets of Venugopal Dhoot, his wife, his company and the firm’s chief financial officer as well as company secretary.
The order was in response to a petition filed by the ministry of corporate affairs (MCA) against the bankrupt group. The MCA’s move comes in the wake of banks being able to recover only 4% of their admitted claims of Rs 64,838 crore under the bankruptcy process.
The government had approached the tribunal under Section 241 and 242 of the Companies Act, which empowers the MCA to act if there is a fraud, misfeasance or persistent negligence.
Responding to the petition, the tribunal has instructed the MCA to serve notices to disclose on affidavit moveable and immovable properties/assets, including bank accounts, owned by them in India or anywhere in the world. It also directed the Central Depository Services (CDSL) and National Securities Depository (NSDL) to freeze all securities held by the respondent, which include the Dhoots, the company and senior management.
The Central Board of Direct Taxes has also been asked to disclose the information it has in its possession of all the respondents.
The Indian Banks Association has been directed to facilitate disclosures of the details of the bank accounts, lockers owned by the respondents (numbers 2 to 6) and such bank accounts and lockers also be frozen with immediate effect.
Finally, the MCA has been instructed to write to state governments and Union Territories to identify and disclose all details of immovable properties held by the respondents.
Despite receiving a bid for only 4% of the admitted debt, which was close to the liquidation value, lenders had agreed to sell Videocon to Twin Star, a Vedanta company.
Unlike enforcement authorities that have sweeping powers, banks under insolvency can only pursue assets of the company that has gone bankrupt. The sale was, however, stalled as the appellate tribunal granted a stay following an appeal from Bank of Maharashtra — a dissenting creditor.
In its order on Wednesday, the NCLT said, “This bench is surprised with the manner in which the financial institution has come forward to grant loans to a sinking ship and again come forward to file petition under Section 7 of IBC and again supports this petition. This certainly rises the eyebrows of the common man in the public.”