In a virtual hearing on Wednesday personal insolvency proceedings against Venugopal Dhoot were admitted and allowed.
Asish Narayan has been appointed as the resolution professional (RP) in the case by a division bench led by judicial member Suchitra Kanuparthi and a technical member Chandra Bhan Singh. The next date of hearing is 20 September.
Lenders to Videocon had filed the personal insolvency petition to attach Dhoot’s assets a year ago and its admission now means recovery process will go on full steam. But it is unclear how the admission of personal insolvency proceedings will impact the NCLT’s order freezing Dhoot’s assets on a plea by MCA on Tuesday.
“The next step in the process would be that the resolution professional will have to submit his report. However, in view of the moratorium imposed by the NCLT under IBC, these proceedings will overlap and the provisions of IBC will override,” said Ashish Pyasi, Associate Partner at law firm Dhir & Dhir Associates. “This will have a bearing on the proceedings initiated by the union of India for disgorgement of assets as now there will be a conflict between two orders under two different statutes.”
State Bank of India (SBI) the lead lender in the consortium of bank creditors to has also taken Venugopal’s brothers and Videocon co promoters Rajkumar Dhoot and Pradipkumar Dhoot under the personal bankruptcy law. Banks led by SBI are seeking to recover a close to Rs 18,000 crore by initiating guarantees given by the Dhoot brothers at different points in time to access loans from banks. Claims from Venugopal Dhoot come to about Rs 6100 crore while two separate petitions have also been filed by SBI has to invoke Rs 6158 crore of personal guarantee given by Pradipkumar Dhoot and Rs 5353 crore to be recovered from Rajkumar Dhoot which are yet to receive the NCLT go ahead.
These guarantees were given by them for a mix of term and working capital loans granted to the company over the years.
Cyril Amarchand Mangaldas is representing SBI in the case. Biswajit Dubey appeared on behalf of the law firm on Wednesday.
Now that NCLT has okayed the recovery process the RP will examine the application and submit his report stating the reasons for approval or rejection of the application within 10 days.
This process is different from the corporate insolvency process and the NCLT will determine going ahead with the personal insolvency based on the report of the RP.
Videocon chairman Venugopal Dhoot is already under CBI investigation on charges of causing a wrongful loss to a consortium of Indian PSU banks led by SBI.
Also, on Tuesday a separate bench of the NCT had directed the attachment of assets belonging to Venugopal and his brother Pradipkumar Dhoot, in a petition filed by the MCA under the Companies Act 2013. The tribunal has sought a lost of Dhoot’s assets including bank and demat accounts to freeze them and initiate recovery proceedings in a bid to enhance the dismal proceeds from the bankrutpcy process initiated by banks against the group so far.
In December over 94% of the creditors by value voted for Vendanta arm Twin Star Technologies as the preferred bidder to take over Videocon. Vedanta’s offer of a little over Rs 3,000 crore was a haircut of more than 95% on admitted claims of Rs 61,770 crore.
“The involvement of the government means that chances of recovery are higher as the government has all means and ways to even recover from even benami accounts. Though these two processes are conflicting in a way because they are going after the same assets, lenders are supporting it because chances have improved significantly through the invocation of the personal guarantees,” said a lawyer involved in the case.
