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2019 (11) TMI 1051 - AT - Insolvency and BankruptcyCIRP - Approval of Resolution plan - exemption from delisting of shares - HELD THAT - In the present appeal, the Appellant raised only one issue with regard to the exemption from delisting of shares on the ground that it was permitted by the Securities and Exchange Board of India (SEBI) on 31st May, 2018. According to the Appellant it has been overlooked by the Adjudicating Authority and no specific order has been passed - Securities and Exchange Board of India (SEBI) 3rd Respondent was noticed and on appearance it has filed an affidavit. Referring to the said Affidavit, the learned counsel for the Appellant submits that there is no requirement for permission of SEBI which stands dispensed with as per regulations mentioned therein. In view of the specific plea taken by the SEBI - 3rd Respondent, no further clarification is required. The Resolution Applicant will act in accordance with the stand taken by the SEBI and in accordance with law, if not yet taken - the order dated 26th July, 2019 passed by the Adjudicating Authority (Ahmedabad Bench) stands clarified/modified. Appeal disposed off.
Issues:
1. Approval of Resolution Plan by Adjudicating Authority 2. Conditions in the Resolution Plan 3. Interlocutory Applications filed by the Appellant 4. Exemption from delisting of shares 5. Stand of SEBI regarding delisting regulations Analysis: 1. The judgment pertains to the approval of the Resolution Plan of the Appellant, 'Reliance Industries Limited,' by the Adjudicating Authority in the Corporate Insolvency Resolution Process of 'Alok Industries Ltd.' The plan was approved by the Committee of Creditors and subsequently by the National Company Law Tribunal, Ahmedabad Bench. The Resolution Plan included various conditions that were to be adhered to by the Resolution Applicant. 2. The Resolution Plan included conditions related to potential amendments or exemptions from laws that may arise before the Closing Date. These conditions covered various scenarios such as delisting of shares, related party transactions, reclassification of promoters, public shareholding requirements, debt assignment, fair value determination, and reduction of capital. The plan also addressed the treatment of stakeholders and the requirements for compliance with applicable laws. 3. The Appellant filed Interlocutory Applications seeking concessions for delisting in accordance with applicable laws. The applications raised concerns regarding the need for specific orders related to Face Value Reduction and Promoter Capital Reduction, which were clarified by the Adjudicating Authority. One application was partially allowed, while no specific order was passed on the other. 4. The Appellant raised an issue in the appeal concerning the exemption from delisting of shares based on SEBI's permission dated 31st May, 2018. The Adjudicating Authority's order dated 26th July, 2019 did not address this issue specifically, leading to a dispute regarding the applicability of SEBI's Delisting Regulations. 5. SEBI, as the 3rd Respondent, clarified its stand on the applicability of the Delisting Regulations in the case. SEBI highlighted the provisions of the regulations, emphasizing that exemptions from delisting regulations are subject to specific conditions outlined in Regulation 3(3). SEBI stated that delisting in cases under the Insolvency and Bankruptcy Code should comply with the specified procedures or provide an exit option to existing public shareholders at a specified price in the resolution plan. In conclusion, the judgment directed the Resolution Applicant to comply with the approved resolution plan and the clarification/modification provided regarding the delisting of shares. The stand taken by SEBI regarding the applicability of Delisting Regulations was upheld, emphasizing the need for compliance with the specified conditions for exemptions.
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