Leading electronics maker Videocon cited unexpected and unforeseen events such as note ban, policy paralysis of the previous UPA government and a Supreme Court order cancelling 2G licenses for the company’s debt woes before the NCLT.
On June 6, the tribunal had admitted an insolvency petition filed by creditors, led by SBI and also appointed an interim resolution professional. According to the lenders, the company has an outstanding debt of Rs 3,900 crore as on December 27, 2017.
While presenting its case before the tribunal, the counsel for VIL argued that the company was forced to shut down one of its profit making business unit due to demonetisation.
“VIL was in the business of manufacturing and supply of Cathode Ray Tube Televisions and being only manufacturer earning considerable profit margin. The business was across the world as there was a large demand of CPR-TV. However, on account of demonetisations in India, suppliers were unable to provide the raw materials. As a result there was a sharp decline in the business and VIL was constrained to close that business,” the counsel argued.
The counsel also said that it had to incur huge losses after the Supreme Court ordered the cancellation of 156 2G licences of several telecom operators in 2012 resulting in non payment of bank liabilities.
Additionally, it had to further incur heavy losses due to a delay in obtaining the approval of the government for its 50:50 joint venture with Brazil Petroleum. The JV agreement was executed in 2008.