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The promoters of Hotel Leelaventure and JM Financial ARC, which holds 26 per cent in the bankrupt hotel group, on Wednesday told the National Company Law Tribunal that ITC’s bid to stall their deal with Brookfield is an attempt to wrest the control of the premium hotel chain through the backdoor.
The counsel for JM Financial ARC said that even after knowing the financial health of Leela, ITC Hotels has been picking up stake in the company between 2008 and 2013, acquiring 13 per cent.
“Through this petition, they want to drag the matter so that the ₹3,950-crore Brookfield deal falls through. Their main aim is not to get returns on investment but to acquire the hotel,” he argued.
“If the sale goes through, public money will be recovered,” he said. JM Financial ARC will get only 6 per cent and the rest will go to 14 banks, he added.
‘Plea should be dismissed’
Meanwhile, the promoters’ counsel in their reply said this waiver application (of 10 per cent stake to be considered as a minority shareholder) needs to be dismissed as ITC’s prayer is contradictory. On the one hand, the counsel said, ITC claims it still owns 11.78 per cent even after conversion of debt into equity, but then it has turned around and asked for the waiver.
He also pointed out that from 2013-2017, ITC did not participate when Hotel Leelaventure voted to dispose many of its properties, and began to take interest in the company only after media reports said it would be revived. “ITC’s intention is grossly mala fide,” he added.
The NCLT will hear the rejoinder of ITC on June 24.
Earlier, ITC and LIC — which owns 2 per cent in Leela — had moved SEBI seeking to stay the deal with Brookfield, saying the ₹3,950-crore deal will leave the holding company a skeleton. Following this, SEBI asked Leela and JM Financial ARC to put the deal, announced on March 18, on hold.
As of now, ITC claims it holds only 8.72 per cent in Hotel Leelaventure, as its stake came down from 11.78 per cent after JM converted debt into equity.
The promoters, along with JM Financial ARC, are proposing to sell 96.8 percent of the company to the Canadian private equity player Brookfield.
On, Tuesday, ITC had argued that since other minority shareholders have very low stakes in Leela, they cannot maintain a petition of oppression and mismanagement. Hence, ITC filed the case, it argued.
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