Assets of Videocon promoters to be frozen, attached

The National Company Law Tribunal (NCLT) has directed to freeze and attach assets and properties of Videocon promoters following a petition by the ministry of corporate affairs.

The NCLT Mumbai bench has directed the Central Depository Services Ltd (CDSL) and National Securities Depository Ltd (NSDL) that securities owned or held by the Videocon promoters "in any company or society be frozen, and be prohibited from being transferred or alienation" and the details be shared with the Ministry of Corporate Affairs (MCA).

It directed the Central Board of Direct Taxes (CBDT) to disclose information about all assets of the Videocon promoters in their knowledge or possession, for the purpose of freezing and restraining such assets.

The NCLT order, late on August 31, directed the Indian Banks Association (IBA) to facilitate disclosure of the details of the bank accounts, lockers owned by the Videocon promoters and ordered that such bank accounts and lockers also be frozen with immediate effect.

The tribunal also gave its permission to MCA to write to the state governments and the Union Territories to identify and disclose all details of immovable properties owned or held by the Videocon promoters.

The order issued by NCLT, Mumbai, directed that all movable and immovable properties of Videocon promoters, including bank accounts, lockers, demat accounts jointly held properties be attached during the insolvency process.

This order came following a fresh petition filed by the MCA seeking permission to attach the assets of Videocon promoters to increase recovery in the case.

The ministry had approached the NCLT against Dhoot and other former directors and senior officials of Videocon Industries Ltd (VIL) under Section 241 and 242 of the Companies Act that deals with oppression and mismanagement in the company.

The tribunal noted that the reserves and surpluses of the flagship company VIL, as declared in the financial statements in 2014, stood at Rs 10,028.09 crore.

"... the same is declared as Rs (-) 2,972.73 crores in FY19, showing the steep downfall in the reserves and surplus just within the period of five years," it stated.

During the same period, secured loans rose from Rs 20,149.23 crore to Rs 28,586.87 crore.

"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 a petition under Section 7 of IBC and again supports this petition.

"This certainly raises the eyebrows of the common man in the public," the tribunal, comprising Bhaskara Pantula Mohan and Narender Kumar Bhola, said in the order.

The bench directed MCA to thoroughly investigate the affairs of the Videocon Group mentioned in the petitions and others.

"Unless it is properly investigated as to how the loans were arranged by the corporate debtors the fraud will not be completely be unearthed that a copy of this order may also be shared with director, Serious Fraud Investigation Office (SFIO) who is already investigating the corporate debtors," the order added.

The tribunal will now hear the matter on September 22.

Photograph: Francis Mascarenhas/Reuters