The National Company Law Appellate Tribunal (NCLAT), New Delhi has rejected a plea against the approval given for SNJ Distilleries’ ₹475 crore takeover bid for Empee Distilleries by its promoter by Shaji Purushothaman.
SNJ had emerged as a successful bidder for Empee Distilleries under the insolvency process and the National Company Law Tribunal, Chennai had approved its plan in January, 2020.
Before the NCLAT, Shaji Purushothaman the promoter/director of Empee Distilleries, argued that his ₹513 crore settlement proposal to lenders was arbitrarily rejected. The NCLAT said Purushothaman’s settlement plan was rejected by lenders due to its structural layout and inability to satisfy them with regards to generation of funds/mobilisation of resources and specific and a clear cut debt/claim satisfaction mechanism.
“Ambiguity in regard to generation/raising of funds for translating the Settlement Plan into action as also in regard to specific schedule of payment to various stakeholders being writ large on the face of the proposed Settlement Plan, it has met the inevitable fate of rejection at the hands of Committee of Creditors,” it said.
The NCLAT also noted that it was flabbergasting to hear the Appellant/Promoter say that the Settlement Plan was ‘just’ and has been arbitrarily rejected. It also noted that SNJ has paid nearly 51% of the monies owed under the resolution plan and also commenced commercial operations of Empee and it cannot be said that a ‘just settlement’ has been arbitrarily rejected.