Once a household name and successful brand, Videocon Industries is going into bankruptcy for defaulting on debt worth Rs 20,000 crore.
Once a household name and successful brand, Videocon Industries is going into bankruptcy for defaulting on debt worth Rs 20,000 crore. Venugopal Dhoot’s Videocon, which has been in the eye of the storm in a recent conflict of interest case against ICICI Bank CEO Chanda Kochhar, is undergoing insolvency process under the Insolvency and Bankruptcy Case (IBC).
The Resolution Professional of Videocon Industries on Tuesday invited bids from prospective buyers for taking controlling ownership of the firm, which has diversified businesses, ranging from consumer durables to oil and gas. The company was among the 28 companies identified by the Reserve Bank of India (RBI) on its second list for huge defaults.
The corporate insolvency resolution process (CIRP) of the company was commenced under the IBC following an order by the Mumbai bench of Company Law Tribunal (NCLT) on June 6. Videocon had in June claimed that its businesses suffered in the wake of government policies, both in India and abroad.
The company said that demonetisation choked its supply for making cathode ray tube televisions, the Supreme Court decision to cancel telecom licenses impacted its telecom business and red tape in Brazil affected its oil-and-gas business.
Videocon was known for its consumer durables business. It later diversified into oil and gas, and then into DTH and telecom, which proved unsuccessful. The company then sold its DTH business to Dish TV and telecom business to Airtel.
The company is also under investigation for alleged quid-pro-quo over Rs 3,250 crore loan it took from ICICI bank. The MD and CEO of the bank, Chanda Kochhar, is also being probed by an independent body for her alleged role in sanctioning loans to Videocon for quid pro quo.