NCLAT asks SEBI to file reply on revised share delisting norms for cos under insolvency

The National Company Law Appellate Tribunal (NCLAT) on Wednesday granted the market regulator SEBI one "last chance" to file its reply on the revised share delisting norms for companies under insolvency. A two-member NCLAT bench headed by Chairperson Justice S J Mukhopadhaya has granted one day time to SEBI for filing of affidavit and said that failing which, it will proceed ahead in the matter.

"It is stated that the copy of the affidavit filed by SEBI has been served on the counsel for the parties. However, no such affidavit has been filed by SEBI in this appellate tribunal," said the NCLAT. "By way of last chance, one-day time is given to SEBI to file affidavit, failing which the appeal may be disposed of on the basis of record.

The appellate tribunal has directed to list the matter on November 18 for orders. The NCLAT direction came while hearing the petition filed by Reliance Industries Ltd, which is seeking waiver in delisting procedure for Alok Industries.

In this matter, two retail investors have also moved the NCLAT and filed intervention application opposing RIL's move to delist Alok Industries contending that the move would erode the value of the company. Earlier in this matter, the NCLAT had on September 11, 2019 impleaded the market regulator SEBI as a party in a petition filed by RIL.

"SEBI is allowed seven days time to file reply affidavit making its stand clear about the amendment relating to delisting of shares," the NCLAT had said on its earlier order of October 15. RIL has got debt-ridden Alok Industries in its fold after the Ahmedabad bench of National Company Law Tribunal (NCLT) approved its Rs 5,050-crore resolution plan earlier this year in March.

However, while approving the scheme, the NCLT did not considered RIL's plea to grant exemptions in delisting and the matter has been now brought before the appellate tribunal NCLAT. Last year, Sebi relaxed requirements to comply with delisting norms for companies facing insolvency proceedings provided the resolution plan lays down the procedure for delisting that particular entity from the exchanges.

In a notification, the markets regulator had said norms pertaining to delisting of equity shares would not be applicable to any entity that is getting delisted pursuant to a resolution plan approved under the IBC. The notification was issued on June 1.

Alok Industries, a Mumbai-based integrated textile company, was in the first list of 12 companies issued by the Reserve Bank of India in 2017 for initiating insolvency proceedings.

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