Market regulator Sebi has restrained Hotel Leelaventure from selling its four hotels and other assets to Brookfield Asset Management in a Rs 3,950 crore deal till its further orders after a representation by Kolkata-headquartered ITC, the debt-ridden firm said Wednesday.
Meanwhile, the Mumbai bench of NCLT issued notices to Hotel Leelaventure, its promoters along with its lender JM Financial over a joint petition filed by ITC and its investment arm Russell Credit Ltd.
ITC and Russell Credit which together hold 8.72 per cent of the issued share capital of Hotel Leelaventure have sought a waiver of 10 per cent minimum shareholding for minority shareholders to be counted in management matters.
The National Company Law Tribunal (NCLT) adjourned the matter to June 18, 2019, for the next hearing.
On March 18, Hotel Leelaventure Ltd (HLVL) had announced sale of its four hotels located in Bengaluru, Chennai, Delhi and Udaipur, as well as a property to Canadian investment fund Brookfield for Rs 3,950 crore. It had sought shareholders approval and voting is scheduled to end on April 24.
The Securities and Exchange Board of India (Sebi) said it has received representations from ITC, which has also moved the National Company Law Tribunal against Hotel Leelaventure alleging "oppression and mismanagement", and minority shareholder Life Insurance Corporation (LIC).
ITC has made certain allegations against HLVL, its promoters and JM Finanacial Asset Reconstruction Company Ltd with respect to postal ballot notice seeking shareholders nod for the sale, the letter by Sebi to HLVL said.
"...While representations are being examined by Sebi, in view of paucity of time involved and in the interest of investors in securities, you are advised to ensure that none of the transactions proposed in the postal ballot notice dated March 18 are acted upon till further directions from Sebi," Hotel Leelaventure said in regulatory filing.
ITC, in its petition filed before the NCLT has alleged that HLVL decision to sell its four hotels and other assets to Brookfield Asset Management would leave the hospitality firm as a "shell company" alleging that the transaction was "prejudicial, oppressive and even fraudulent."
According to ITC, the minority shareholders including it "will receive nothing and will be left holding worthless shares with no underlying business or assets left within Hotel Leelaventure."
It further said that even if any valuation report existed Hotel Leela "did not provide inspection of any valuation report(s) in respect of the Transaction."
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