SREI Infrastructure Finance Ltd, SIFL, which owns 51 per cent of the fund management firm Trinity Alternative Investment Managers Ltd, is expecting a dilution of its shareholding in the subsidiary after it has issued its right issue.
The remaining 49 per cent of the shareholding is owned by Payaash Capital Singapore Pte Ltd.
A two-member NCLAT bench, while disposing of SREI Infrastructure Finance Ltd SIFL petition, observed that the National Company Law Tribunal NCLT has ordered a status quo and is yet to pass any order over the plea filed by the non-banking financial company.
The appellate tribunal ordered NCLT to take up the matter on February 18, 2022, as scheduled, without any further adjournments, and deal with all issues.
SIFL is currently going through the Insolvency Resolution process after the NCLT admitted a plea by the Reserve Bank of India.
In October of last year, an administrator was appointed and SIFL was currently under moratorium as per the provisions of the Insolvency Bankruptcy Code IBC. SIFL approached the right issue process on November 18, 2021 against the right issue process, alleging oppression and mismanagement under sections 241 and 242 of the Companies Act. It had initiated the process of removal of directors from the board of Trinity.
The bench of Kolkata had passed an interim order on December 6, 2021, and was directed to maintain a status quo until the hearing of the petition.
The order to maintain the status quo was challenged by SIFL before NCLAT, who claimed that NCLT restrained it from using its statutory rights under Section 100 calling extraordinary general meeting and Section 169 removal of directors of the Companies Act.
The impugned order effectively restrained the 51 per cent shareholder of SIFL from exercising its statutory rights and following a prescribed procedure to remove an appointed director despite there being no request or prayer wheresoever. The impugned order is passed in respect of an issue that is not even remotely connected with the pending matter before NCLT i.e. The right issue, submitted by Solicitor General Tushar Mehta representing SIFL before NCLAT.
The NCLT order has the effect of delaying the timelines under IBC, because it interferes with the functioning of the administrator of SIFL.
Counsel representing Trinity said that NCLT had not expressed any opinion on the merits of the matter and when a petition is filed under Sections 241 and 242, NCLT has the power to pass any interim order it thinks fit.
The aforenoted section empowers the tribunal to pass any interim order on an application made by any party to the proceeding, which it thinks is fit for the conduct of the company's affairs upon such terms and conditions as appear to it to be just and equitable.
On a careful examination of the contentions projected by both sides and the pleadings put forward, this Tribunal arrives at the resultant conclusion without expressing any opinion on the merits of the matter, and also not delving deep into the case, as allegations of 'oppression and mismanagement' consist of mixed questions of fact and law that cannot be decided at this interim stage, and directs the NCLT Kolkata Bench to take up the matter on February 18, 2022, said the NCLAT.