Alok Industries, a Mumbai-based integrated textile company was in the first list of 12 companies issued by the Reserve Bank of India in 2017 for initiating insolvency proceedings.
The National Company Law Appellate Tribunal (NCLAT) has impleaded the market regulator SEBI as a party in a petition filed by Reliance Industries Ltd, which is seeking waiver in delisting procedure for Alok Industries. A two-member NCLAT bench headed by Chairman Justice S J Mukhopadhaya has issued notice to the Securities and Exchange Board of India (Sebi) as a proforma respondent for this. RIL has got debt-ridden Alok Industries in its fold after the Ahmedabad bench of National Company Law Tribunal (NCLT) approved its Rs 5,050-crore resolution plan earlier this year in March. However, while approving the scheme, the NCLT did not considered RIL’s plea to grant exemptions in delisting and the matter has been now brought before the appellate tribunal NCLAT. “… taking into consideration the fact that the Appellant (RIL) has relied on SEBI Amendment Notification.
Let SEBI be impleaded as proforma Respondent No 3,” said NCLAT. The order added, “Formal Notice be issued on SEBI.” The appellate tribunal has also directed the resolution professional and the Committee of Creditors (CoC) of Alok Industries to file their reply affidavit within two weeks and rejoinder, if any, within one week thereof.
The NCLAT had directed to list the matter on October 15, 2019 for admission of RIL’s plea. Alok Industries, a Mumbai-based integrated textile company was in the first list of 12 companies issued by the Reserve Bank of India in 2017 for initiating insolvency proceedings. Last year, Sebi relaxed requirements to comply with delisting norms for companies facing insolvency proceedings provided the resolution plan lays down the procedure for delisting that particular entity from the exchanges.
In a notification, the markets regulator had said norms pertaining to delisting of equity shares would not be applicable to any entity that is getting delisted pursuant to a resolution plan approved under the IBC. The exemption would be subject to conditions that the resolution plan “lays down any specific procedure to complete the delisting of such shares” or that the plans provides an exit option to the existing public shareholders at a specified price. The notification was issued on June 1.