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Tuesday, December 01, 2020

Ex-NCLAT chairperson joins Liberty House parent group advisory board

Retired Supreme Court judge Justice S J Mukhopadhaya has been appointed to a 17-member global advisory board of the Gupta Family Group (GFG) alliance.

By: ENS Economic Bureau | New Delhi | Updated: October 24, 2020 7:18:58 am
S J Mukhopadhaya (Source: nclat.nic.in)

Former National Company Law Appellate Tribunal (NCLAT) chairperson and retired Supreme Court judge Justice S J Mukhopadhaya has been appointed to a 17-member global advisory board of the Gupta Family Group (GFG) alliance. The new board will help the alliance “in delivering its strategic priorities and achieving best practice in the environment, social and governance”, the alliance said in a statement.

During his tenure as the NCLAT Chairperson, Justice Mukhopadhaya had presided over some cases of insolvency and bankruptcy, in which the Liberty House group was a bidder for insolvent companies.

The GFG Alliance which has the Liberty Steel Group, the Alvance Aluminium Group and the SIMEC Energy Group under its umbrella, had announced the appointment of these 17 experts on October 13. Justice Mukhopadhaya is the only appointee from India on the global board.

Mails sent to the GFG Alliance, seeking details about what would be the scope of work of Justice Mukhopadhaya and his tenure remained unanswered. Justice Mukhopadhaya, who was appointed as the first chairperson of NCLAT in 2016, had retired on March 13 this year, having completed his tenure.

The NCLAT has remained without an appointed head ever since. Justice Bansi Lal Bhat, a former judge of the Jammu and Kashmir High Court, took over as the acting chairperson of NCLAT on March 15 and has been heading the appellate tribunal since then. He is likely to continue as the acting chairperson until at least December 31 this year, senior officials said.

Officials at the Ministry of Corporate Affairs (MCA), the nodal ministry for the appointment of members to the NCLAT as well as the National Company Law Tribunal (NCLT), said they were not aware of Justice Mukhopadhaya’s appointment to the GFG Alliance board. The officials, however, added there was no rule which mandates MCA being informed.

“There is no prescribed cooling-off period or the requirement of informing the MCA as such. Once a member retires after their tenure, what they do is none of our concern. There is no rule for informing the MCA either,” a senior official said.

One such company, for which the Liberty House had bid and then withdrawn its offer was Amtek Auto. The corporate insolvency resolution process of the company, which remains pending more than three years after it was initiated, had seen Justice Mukhopadhaya pointing out to the Liberty House group that it was not following through with its resolution plan.

“You are a failure party…all the time dragging your feet. You are in bad reputation. We will not allow you to take advantage of the appellate tribunal,” a two-member Bench of the NCLAT, then headed by Justice Mukhopadhaya had observed.

Later, during another hearing in the case, the appellate tribunal had also asked the MCA if it could pass an order for the arrest of directors and owners of companies which were successful resolution applicant, but were unwilling to implement the resolution plan after approval.

The Liberty House group had emerged as the highest bidder for Amtek Auto, which owes more than Rs 12,300 crore to the banks. However, when the resolution professional (RP) and the lenders to Amtek Auto moved to implement the resolution plan, the company stalled its plan, claiming that the information given to it by the RP did not match the conditions on the group and that it was misled.

Liberty House Group had then also told the NCLAT that there were valuation differences between the Amtek Auto’s records on paper and on ground.

An order of liquidation against Amtek Auto, passed by the Justice Mukhopadhaya in his capacity as the NCLAT chairperson, in August last year, was challenged in the Supreme Court, and remains pending there.

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