C. Sivasankaran – Bijoy Ghosh
Matter listed for hearing in NCLAT on Monday
Serial entrepreneur C Sivasankaran, promoter of Siva Industries, has filed an appeal in the National Company Law Appellate Tribunal (NCLAT), Chennai, against the recent order of the National Company Law Tribunal (NCLT), Chennai, on liquidation of Siva Industries.
The NCLT, on August 12, ordered liquidation of Siva Industries and rejected lenders’ proposal to withdraw the company from bankruptcy proceedings. It also rejected the application filed by Resolution Professional of Siva Industries.
The NCLT Bench said thatboth the Committee of Creditors (CoC) and promoter of the corporate debtor had not reached a final decision as per Clause 2 of Chapter VIII of the settlement proposal. “Hence based on the ambiguity of terms of settlement, we cannot order for the withdrawal of the Corporate Insolvency Resolution Process,” said the order.
The Bench also concluded that the prayer seeking for liquidation of the corporate debtor in case of any default in the proposed settlement plan transcends beyond the scope of Insolvency and Bankruptcy Code (IBC), 2016.
The promoters of Siva Industries had proposed to pay ₹328.21 crore to IDBI Bank-led consortium of lenders as a one-time settlement plan to withdraw the company from proceedings under the IBC at NCLT. Siva Industries’ debt is about ₹4,863 crore and the settlement plan amounted to a haircut of about 93.5 per cent for banks. Under the offer, which was approved by the lenders in early April, the promoters would pay only ₹5 crore upfront and the balance within 180 days of approval.