The National Company Law Appellate Tribunal (NCLAT) on Thursday dismissed a petition by the promoters of Ferro Alloys Corporation challenging sale of the debt-ridden firm to Vedanta group firm Sterlite Power Transmission Ltd. An NCLAT bench headed by Chairperson Justice S J Mukhopadhaya upheld the order of the Cuttack Bench of National Company Law Tribunal (NCLT), which had approved Sterlite Power Transmission Ltd’s (SPTL) bid for Ferro Alloys Corporation observing that the order was passed with “proper application of mind and conform to the proposition of law”.
Rejecting the plea from Ram Kishan Saraf and Rai Bahadur Shree Ram and Company, the appellate tribunal said that they “cannot question the commercial wisdom of the Committee of Creditors” in selection of a resolution plan.
Earlier, the Committee of Creditor (CoC) had approved Sterlite Power Transmission Ltd’s (SPTL) bid by 95.15 per cent of voting share, which was subsequently also passed by the NCLT on January 30, 2020.
While, approving it, the NCLT had also rejected the settlement proposal from the promoters, which was challenged by them before the appellate tribunal.
However, the NCLAT also rejected it by observing “the Appellants cannot question the commercial wisdom of the CoC in rejecting the settlement proposal emanating from the Appellants, with the requisite majority and in approving the Resolution Plan of SPTL.”
The NCLAT also observed that “no material irregularity in Corporate Insolvency Resolution Process before the Resolution Professional has been demonstrated.”
“Merely because the Adjudicating Authority (NCLT) has declined to direct reconsideration of the already rejected settlement proposal of Appellants does not impinge upon the legality and conformity of the approved Resolution Plan with the conditions stated in Section 32 of the I&B Code,” it said.
“We find that the impugned orders have been passed on proper application of mind and conform to the proposition of law,” said NCLAT adding that “we find no merit in these appeals and same are dismissed.”
Ferro Alloys is India’s largest and established producers and exporters of high carbon ferro chrome/charge chrome worldwide, an essential ingredient for the manufacture of steel and stainless steel.
It operates Ferro Manganese Plant in Shreeramnagar, Andhra Pradesh to produce Ferro Manganese. It also has a Chrome Ore mining complex at Bhadrak in Orissa.
Source: The Economics Times