The National Company Law Tribunal (NCLT) has admitted Videocon Industries for insolvency proceedings.
The company claimed that its financials were impacted by demonetisation, Supreme Court’s cancellation of 2G licences and its inability to develop Brazilian oil blocks due to pending approvals.
IRP appointment
The board of directors’ powers have been transferred to Anuj Jain who has been appointed as the interim resolution professional (IRP).
Videocon’s counsel argued before the NCLT that the group had suffered huge losses in the telecom business on account of cancellation of telecom licences by the Supreme Court leading to non-payment of bank dues. The counsel also cited demonetisation as one of the reasons for the closure of the company’s cathode ray tube televisions (CRT-TV) business as the Indian suppliers were not able to provide raw materials.
Videocon Industries’ shares fell 4.91% to a 52-week low of ₹7.56 on the BSE after the company informed that the Mumbai bench of the NCLT had admitted the reference for initiation of Corporate Insolvency Resolution Process (’CIRP’) under Sec. 7 of the Insolvency and Bankruptcy Code, 2016 (IBC). The insolvency petition was filed by a consortium of lenders led by SBI.
Venugopal Dhoot, chairman Videocon Industries, told The Hindu, “I have never criticised demonetisation or our PM. I always praised him. We have moved to making smart televisions and closed down our CRT-TV.”