The National Company Law Tribunal (NCLT) has expressed surprise that the bid placed by the Vedanta Group for acquiring 13 companies under the Videocon Group was almost the same value arrived at by the registered valuers for liquidation.

According to the valuation reports, the fair value of the Videocon group was ₹4,069.95 crore while the liquidation value was ₹2,568.13 crore. Twin Star Technologies, a company under Anil Agarwal’s Vedanta group, has offered ₹2,962.02 crore to acquire Videocon. “Surprisingly the Resolution Applicant also valued all the assets and liabilities of all the 13 companies and arrived at almost the same value of the registered valuers,” NCLT said while approving Twin Star’s bid.

Confidentiality clause

According to the CIRP regulations, the liquidation value and fair market value is kept as confidential and informed to the COC members only at the time of finalising the resolution plan. NCLT said, “a doubt arises upon the confidentiality clause being in real time use therefore, we request IBBI to examine this issue in depth so as to ensure the confidentiality clause is followed unscrupulous, without any compromise in letter and spirit by all the concerned parties, entities connected in the CIRP.”

“If not IBBI can frame appropriate regulations, safeguards there by the maximisation of value of the assets of the Corporate Debtor(s) would further increase which in turn will benefit all the stakeholders. Since IBC is a nascent code we feel “this type of input may be useful to the IBBI as well as to the Government to frame appropriate regulations, rules, etc,” it added.

Meanwhile, Videocon has informed the stock exchanges that the new owners will delist the company and the public shareholders will not get anything from the proceeds of the debt resolution.

Vedanta has primarily acquired Videocon for access to its Ravva oil and gas field in Block PKGM-1which is located in the shallow offshore area of the Krishna-Godavari basin on the eastern coast of India.

The block is operated by Cairn Oil and Gas which holds a 22.5 per cent stake in it along with ONGC (40 per cent), Videocon group (25 per cent) and Ravva Oil (12.5 per cent) as joint venture partners under a production sharing contract (PSC) with Government of India.