Lawstreet Journal

NCLT Orders Inclusion Of Overseas Subsidiary Of Defaulter Company In Local Insolvency Proceedings

Lawstreet Journal 18 Feb 2020 3:32pm

Image courtesy: Lawstreet Journal Business NCLT Orders Inclusion Of Overseas Subsidiary Of Defaulter Company In Local Insolvency Proceedings

National Company Law Tribunal (NCLT) Mumbai’s bench comprising Suchitra Kanuparthi and Chandra Bhan Singh on February 13, 2020 ordered for inclusion of overseas Subsidiaryof Videocon’s Oil businesses in Indonesia and Brazil as part insolvency proceedings in India. This is first time that NCLT order inclusion of overseas assets of defaulter company in local insolvency proceedings. 

“... we have concluded that foreign oil and gas assets of the group held through VOVL, VHHL, VEBL and VINI, are in fact, the assets and property of VIL…. Therefore, the assets held by them can be said to be ‘its’ assets, which is under the insolvency,” the order noted.

Judges also allowed a moratorium on the foreign petroleum assets of the group which will restrain its lenders from selling the conglomerate’s overseas assets. To which State Bank of India (SBI) responded that extension of moratorium to the overseas assets could delay recovery of money from sale of the assets. In addition, the order cited that since some time has passed in deciding the application, the time spent in deciding this application from August 22, 2019 until the date of the order, is added in the permitted timeline for the completion of the ongoing insolvency process.

The assets include stakes in overseas oil blocks held through Videocon arms incorporated in the Cayman Islands and British Virgin Islands. These were purchased after Videocon entered an agreement with state-run Bharat Petroleum Corporation Ltd. 14 years ago to search for foreign investment opportunities jointly. The two partners reportedly invested over $2… Continue Reading...

Tagged: National Company Law Tribunal  
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