A division bench of the Karnataka High Court on Monday rejected a plea by Vijay Mallyas Group holding firm United Breweries Holdings (UBHL) not to admit a winding-up petition against it. United Breweries had appealed before the bench against the order of courts single judge bench on November 19,which had admitted the petition then.
Rejecting the appeal by United Breweries (Holdings) Ltd,the court said that there were several such pending petitions filed by creditors to recover their debt,so prima facie it was not satisfied that the company would be able to discharge its entire liabilities running into almost Rs 9,000 crore.
The division bench also rejected a plea by United Breweries Holdings to stay the publication of newspaper advertisements relating to the petition and said that the proceedings of the winding-up petition should be expedited.
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A single bench judge had on November 19 admitted a winding-up petition filed by BNP Paribas,which is claiming corporate guarantees for $26.63 million given by United Breweries Holdings to cover Kingfisher Airlines acquisition of three ATR 72-212A aircraft in 2006. The order also allowed BNP Paribas to publish newspaper advertisements relating to its petition by mid-December.
Prima facie,we are not satisfied they will be able to discharge the entire debt, a bench comprising Justice N Kumar and Justice Rathnakala said. It noted that several winding-up petitions were pending before the court,including one filed by a consortium of banks,led by SBI,and in which public money to the extent of Rs 6,000 crore is involved. The court has to be circumspect and has to protect the interests of a class of creditors before it.
United Breweries Holdings is facing around eight winding-up petitions. Last week,the company court of the Karnataka HC admitted a second winding-up petition filed against United Breweries Holdings by aircraft maker Avions de Transport Regional GIE (ATR),which is claiming a due of Rs 92 crore.
Senior counsel Harish Salve,arguing on behalf of UBHL,said that the corporate guarantees claimed by BNP Paribas could not be enforced according to law because the RBIs permission for the guarantees was only in favour of KF Aero,the special purpose vehicle for the aircraft acquisition,and did not extend to BNP Paribas,which was an assignee. UBHL also argued that BNP Paribas did not serve any notice of its assignment.
United Breweries Holdings said that the single judge had not looked into whether the company was commercially solvent. BNP Paribas counsel Feresthe Sethna argued that the RBI approval was for the entire corporate guarantee arrangement and also included the assignees of KF Aero.