9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (5) TMI 752 - Tri - Insolvency and BankruptcySeeking rectification of order - delisted company (process of de-listing shall be completed by the Monitoring Committee in accordance with the the Resolution Plan) - typographical error - it is alleged that this Adjudicating Authority vide order dated 14.10.2021, inadvertently, directed the Resolution Applicant to maintain the public shareholding at a minimum 5% which is applicable on the listing company - HELD THAT - It is noted that this Adjudicating Authority vide its order dated 14.10.2021 at para-10(10)(X) has already given a direction for extinguishment of the share capital of the Corporate Debtor without any payment (including any cancelled value of the said equity shares or preference shares). However, this Adjudicating Authority, given a direction to the Resolution Applicant to maintain the public shareholding at minimum 5% which is not applicable as against the Corporate Debtor. As it has been proposed in the Resolution Plan (at para 4.6.1) for de-listing of the securities from NSE and BSE as per applicable Regulations and directions of this Adjudicating Authority after the approval of the Resolution Plan. The same has already been complied with by the Monitoring Committee and the NSE and BSE have delisted the securities of the Corporate Debtor. Hence, the direction with respect to maintain the minimum 5% public shareholding is merely a typographical error and it will not affect the object or any implications of the Resolution Plan. Necessary rectification is to be carried out - application allowed.
Issues:
Rectification of order regarding maintenance of public shareholding at minimum 5% in a Resolution Plan for de-listing securities of a Corporate Debtor. Analysis: 1. Rectification Application: The applicant filed an application seeking rectification of an order dated 14.10.2021 passed by the Adjudicating Authority in relation to a Resolution Plan for a Corporate Debtor admitted into Corporate Insolvency Resolution Process. 2. Contention: The main contention revolved around a typographical error in the order which directed the Resolution Applicant to maintain the public shareholding at a minimum of 5%, contrary to the Resolution Plan's provision for de-listing the Corporate Debtor's securities from stock exchanges. 3. Resolution Plan Provisions: The Resolution Plan contained para 4.6.1 specifying the de-listing process of the Corporate Debtor's equity shares from BSE and NSE in accordance with SEBI regulations, to be completed post-approval of the Resolution Plan. 4. Order Analysis: The Adjudicating Authority's order dated 14.10.2021, while directing the extinguishment of existing share capital without payment, erroneously included a provision for maintaining public shareholding at 5%, which was not applicable to a de-listed company as per the Resolution Plan. 5. Monitoring Committee Compliance: The Monitoring Committee facilitated the de-listing of the Corporate Debtor's securities from BSE and NSE, as communicated to the stock exchanges, leading to the successful de-listing of securities from both exchanges. 6. Judgment: After hearing both sides, the Tribunal acknowledged the typographical error in the order and concluded that the direction to maintain a 5% public shareholding was not applicable post-de-listing. Therefore, the Tribunal allowed the rectification application and corrected the order to align with the Resolution Plan's provisions for extinguishment of share capital without payment, allowing the Resolution Applicant to issue new equity share capital as per applicable laws. 7. Disposition: Consequently, the Tribunal allowed and disposed of the rectification application, bringing clarity to the Resolution Plan's implementation regarding the de-listing of the Corporate Debtor's securities without the requirement of maintaining a minimum public shareholding post-de-listing.
|
