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Informist, Thursday, Apr. 17, 2025

 

--NCLAT notice to SEPCO Electric on Talwandi Sabo's plea against NCLT order 

--CONTEXT: NCLT rejected Vedanta's Talwandi Sabo Power unit demerger scheme 

 

NEW DELHI – The National Company Law Appellate Tribunal on Thursday issued a notice to SEPCO Electric Power Construction Corp. on a petition by Talwandi Sabo Power Ltd. against the National Company Law Tribunal, Mumbai bench's order, to reject Talwandi Sabo's scheme of arrangement for demerger. Last month, the Mumbai tribunal had rejected the scheme for demerger filed by Vedanta's arm Talwandi Sabo over failure to disclose INR 12.51 billion debt to creditor SEPCO Electric Power.

 

Talwandi Sabo Power argued that the Mumbai tribunal could have rejected their application for convening a meeting, but not the whole demerger scheme. Talwandi Sabo Power sought a stay on the Mumbai tribunal's order. The appellate tribunal will now hear the case next on Apr. 29. 

 

In September 2023, Vedanta's board had approved the demerger of its operations into five separate subsidiaries--Vedanta Aluminium Metal Ltd., Talwandi Sabo Power, Malco Energy Ltd., Vedanta Base Metals Ltd., and Vedanta Iron and Steel Ltd. But, later in December Vedanta decided not to implement the demerger of its base metals operations.

In November, NCLT had asked Vedanta to convene a meeting of its shareholders, secured creditors, and unsecured creditors within 90 days, pursuant to the company's scheme of arrangement. But Talwandi Sabo Power was a non-applicant company in the aforementioned scheme and had filed a separate company scheme application with the NCLT. Vedanta, Vedanta Aluminium Metal, Malco Energy, and Vedanta Iron and Steel are non-applicants under the application filed by Talwandi Sabo Power in the NCLT.  

 

China-based SEPCO Electric Power had raised objections to the demerger of Talwandi Sabo and said that the power unit had deliberately excluded their outstanding debt of INR 12.51 billion from the list of creditors. Rejecting the scheme in March, the Mumbai tribunal said, "...material facts have not been disclosed by the applicant company, violating Section 230 (2)(a) of the Companies Act, 2013, which in our considered opinion is bound to prejudice the public interest at large."

 

At 1308 IST, shares of Vedanta Ltd. were up 0.6% at INR 400.75 on the National Stock Exchange.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Vandana Hingorani

 

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