The NCLT on Tuesday directed Securities and Exchange Board of India (Sebi) to conclude its probe into complaints against Hotel Leelaventure by the firms's minority shareholders by July 8, the next date of hearing.
The tribunal on Tuesday adjourned the Hotel Leela insolvency case to July 8, even as Leela’s counsel was seeking a four-month adjournment in the matter. JM Financial ARC, a financial creditor to the hotel chain, had moved an insolvency plea against the hotel in February. It was assigned 95.6 per cent of the debt owed by Leela after the corporate debt restructuring mechanism failed. JM Financial ARC had, in September 2017, converted loans worth Rs 275 crore into 26 per cent equity stake in the company. Moreover, a separate company petition has been filed by ITC, one of the minority shareholders of Hotel Leela, on the grounds of oppression and mismanagement to which the tribunal has issued notices to the respondent and the matter is posted for hearing on June 18.
To pare its debt of Rs 3,800 crore, the cash-strapped company had entered a deal to sell several hotel properties in Bengaluru, Chennai, Delhi, and Udaipur to Canada-based Brookfield Asset Management. The deal with Brookfield is expected to fetch Leela Rs 3,950 crore.
ITC has alleged that the Brookfield transaction is prejudicial, oppressive and even fraudulent aimed at stripping Leela of its value, leaving it as a shell company with only liabilities residing therein and benefitting the promoters who would receive at least Rs 300 crore in simultaneous and associated side deals.
The minority shareholders, on the other hand, will receive nothing and would be left holding worthless shares with no underlying business or assets left within, it alleged.
Sebi, acting upon the allegations, had ordered Leela to not proceed with the Brookfield Asset Management deal. The Leela board has already approved the deal and the shareholders have also given a go-ahead to the deal, which cannot proceed without a nod from the market regulator.