The National Company Law Tribunal (NCLT) Chennai has rejected the debt resolution proposal of Siva Industries, promoted by C Sivasankaran, and ordered the liquidation of the company.
Rejecting the proposal, the Bench said, “We conclude that this is not a proposal under Section 12A, but rather a restructuring proposal. There is no offer, nor a final acceptance. There is only ambiguity about the offer, hence this application stands dismissed.”
The resolution plan was earlier cleared by the committee of creditors (CoC) led by IDBI Bank. The NCLT said the settlement offer made by RCK Vallal, one of the shareholders of the company and father of Sivasankaran, does not conform to Section 12A of IBC.
The NCLT had asked lenders to explain the huge haircut in one-time settlement plan approved by the CoC. As part of the proposal, banks will get 6.5 per cent of debt of Rs 4,863 crore from the offer made by the Sivasankaran family.
The family offered to pay Rs 5 crore upfront and the rest within 180 days of approval.