The National Company Law Appellate Tribunal (NCLAT) has pronounced its order in favour of the existing promoters of Appu Hotels in a case pertaining to a takeover bid by MGM Healthcare’s Managing Director M K Rajagopalan.

The Divisional Bench-1, Chennai, has passed an order stating, “The powers of the Board of Directors which stood suspended is restored and the management and affairs of the Corporate Debtor is directed to be handed over to them by the RP (Resolution Professional), including the possession and control of books and assets of the Corporate Debtor, if any taken during the CIRP (corporate insolvency resolution process) period.

“The RP is discharged from all his responsibilities. The position of the Corporate Debtor is restored to status quo ante prior to the Insolvency Commencement date. The Corporate Debtor shall operate through its own Board,” it said.

Thus, the settlement proposal submitted by the Promoter of Appu Hotels Palani G Periasamy is accepted and allowed, and the resolution process is withdrawn. AHL’s original “Board of Directors” is restored.

The NCLT had approved Rajagopalan’s ₹423-crore resolution bid to take over Appu Hotels, which owns and operates hotels Le Meridien in Chennai and Coimbatore. Periasamy had contended that the total value of the assets (which includes two Le Royal Meridien Hotels and vacant land parcels near Chennai airport) was four times the value proposed in Rajagopalan’s resolution plan. The NCLAT offered Periasamy an opportunity to submit a fresh plan to corporate creditors. 

Consequently, promoters of Appu Hotels filed an application under Section 12-A of the Insolvency and Bankruptcy Code and deposited ₹420 crore in cash and bank guarantee. Rajagopalan had moved the apex court against the NCLAT order. The Supreme Court upheld the NCLT verdict and also dismissed a review petition later.

Back to business

With the verdict coming in favour of Periasamy, the five-star Hotel Le Royal Meridien at Guindy in Chennai will be back to full-scale operation, said the company.

“We are delighted to announce that we are back in the hospitality business. Hotel Le Royal Meridien Chennai and Le Meridien Coimbatore are back with us. It is heart-warming news for us on the eve of the dawn of the New Year,” said Periasamy, a leading NRI Industrialist and Chairman of Appu Hotels Ltd.

Covid-19 and prolonged lockdown had impacted the hospitality business in general and the Appu Hotels, in particular, he said. “Our finances took a severe hit, leading us into the NCLT framework. But, all that is now behind us,” he added.

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