The Ministry of Corporate Affairs (MCA) is planning to attach and disgorge money from Videocon Industries. MCA has identified assets worth more than Rs 5,000 crore. The ministry is in the process of identifying more assets, say sources.
A source close to the development told Moneycontrol: “The government is closely watching the resolution of the Videocon case, in which banks are getting only 4.15 percent of their total outstanding. This is one of the largest bankruptcy cases in India. The government is exploring all avenues to recover maximum money. In this process, MCA is using the power to attach company’s assets and disgorge money by selling their assets”.
Also Read: Banking Central | The curious case of Videocon insolvency
“Assets worth more than Rs 5,000 crore has already been identified. More are being identified,” the source said.
MCA has filed an application at the National Company Law Tribunal (NCLT), Mumbai, under Section 241& 242 of the Companies Act for attaching the properties of Videocon. NCLT Mumbai bench may hear the application this week.
These Acts mainly deal with issues of company mismanagement.
In 2018, an application for initiation of bankruptcy proceedings under the Insolvency and Bankruptcy Code, 2016, was filed against Videocon Industries. The total claim amount was around Rs 71,433.75 crore. The claims admitted are for Rs 64,838.63 crore.
In December 2020, a committee of creditors (CoC) had approved the Anil Agarwal-backed Twin Star’s Rs 2,900 crore plan for 13 Videocon firms. However, Venugopal Dhoot, the company chairman and founder, challenged this plan in NCLAT.
Dhoot, in his petition to NCLAT, requested that the NCLT order be set aside and lenders directed to consider the Rs 31,789-crore settlement plan submitted by him. Videocon Industries and its 12 group companies owe Rs 64,838.63 crore.
Three banks, including Bank of Maharashtra and SIDBI, and IFCI and ABG Shipyard, which holds a 0.024 percent stake, have raised concern about the low amount of recovery in the resolution.
Also Read: Videocon insolvency | This is one IBC resolution not worth celebrating
Moneycontrol tried to contact Venugopal Dhoot but his mobile phone was switched off.
MCA has already ordered a Serious Fraud Investigation Office (SFIO) probe on Videocon Industries. SFIO had searched the premises of the company and the promoter in July.
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