The Company Law Board has halted the sale of assets by two Ansal Group firms, Ansal Seagull SEZ and Ansal Colors Engineering SEZ, and ordered them to maintain status quo with respect to their properties and shareholding.
The CLB's directive came over a petition filed by Seagull Buildwell, Ansal's joint venture partner in Ansal Seagull SEZ. Seagull Buildwell has challenged the sale of property owned by Ansal Colors Engineering SEZ -- a subsidiary of Ansal Seagull SEZ -- at a grossly undervalued price.
The two firms have also been restrained from holding board meetings without the CLB's permission over a "prima facie breach" of the rules and regulations.
"In the facts and circumstances of the case... For the breach of the fiduciary duty by Ansal group firms... Ansal Seagull SEZ and Ansal Colors Engineering SEZ are directed to maintain status quo with respect to the assets of the companies' shareholding, directorship of the companies and not to hold board meeting of the shareholders without permission...," the CLB said.
Ansal Seagull SEZ was formed for developing a SEZ at Murthal, in Sonipat, Haryana. Ansal Colors Engineering SEZ is a wholly owned subsidiary of Ansal Seagull SEZ.
Seagull Buildwell has alleged that Ansal took a Rs 50 crore loan from L&T Finance to acquire additional land for the project in 2006. It had pledged assets and two crore shares of Ansal Colors Engineering SEZ as collateral for the loan.
However, Ansal was later unable to repay the loan it had taken, following which it sold the shares and assets of Ansal Colors Engineering SEZ to Ansal Properties and Infrastructure and Anand Rathi Financial Services for Rs 50 crore.
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Advocates Arun Kathpalia and Ranjana Roy Gawai, appearing for Seagull Buildwell, submitted before the CLB that it was the duty of the Ansals to arrange the funds for establishment of the Special Economic Zone (SEZ), as the JV partner had already put in its share of Rs 160 crore.
They further alleged that L&T Finance, in collusion with the Ansals, had sold all of Ansal Colors Engineering SEZ's shares and assets to API and ARFS for just Rs 50 crore, whereas the current market value of just the land alone was above Rs 500 crore.
However, the Ansal Group firms rejected the contention, arguing that since the liabilities of the company were the responsibility of both JV partners, L&T Finance was entitled to recover its money through the liquidation of the assets and shares.
Based on the submissions, the CLB has now directed all the parties, including the Ansal group firms, to file their response within four weeks before its next hearing, scheduled for January 27, 2011.