After NCLAT, NCLT now rightfully dismisses appeal of Hindustan Oil Exploration Company

 

December 29, 2020, New Delhi: A listed oil company, Hindustan Oil Exploration Company (HOEC)’s attempt to jeopardize implementation of the Resolution Plan completed on Sept 2020 was struck down for the third time by NCLT’s Allahabad Bench on Dec 21, 2020. This comes at the backfoot of HOEC’s repeated appeal dismissals previously by the NCLAT, starting from 2018. While the Company has not paid dividends for years and the share price has been anything but speculative, the Management of HOE conniving attempts are costing the shareholders dearly.

HOEC’s guileful steps of repeatedly approaching the judiciary system is to seek a result that aligns with its malicious plan of forcing JEKPL into liquidation and then gaining control of its participating interest in Kharsang Field at nil value through one of its offshore subsidiaries. This motive was foreseen by NCLAT in March 2020 when it dismissed HOEC’s petition for the second time against NCLT, Allahabad Bench’s order on Feb 2020, declaring Invenire Energy as the successful resolution applicant in the second bidding round which was concluded in June 2019. The bench dismissed HOEC’s appeal for lacking any legal standing. During the recent and third turn down of its appeal, the Hon’ble NCLT admonished the behavior of HOEC during the court proceedings, which were held virtually. The second round of bidding itself was conducted as HOEC had disputed the NCLT Allahabad Bench awarding Invenire Energy as the successful resolution applicant on Dec 2017.

The malevolent steps of HOEC dates to 2017 when JEKPL an oil and gas holding interest in prolific Kharsang Oil Field, located in North East, was referred to the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC). Its Committee of Creditors (CoC) included State Bank of India, EXIM, and Central Bank of India and it had no operational creditors. Two companies, one a listed oil company, Hindustan Oil Exploration Company (HOEC) and a private equity SPV, Invenire Energy, emerged as interested parties. Final bids were invited for JEKPL in December 2017 with Invenire Energy emerging as the successful resolution applicant, with endorsement by the CoC for more than qualifying the majority. Hon’ble NCLAT, Allahabad Bench, passed the award on Dec 2017 declaring Invenire Energy as the successful resolution applicant.

So far, the financial creditors comprising of State Bank of India, EXIM and Central Bank of India have received entire consideration of INR 123 crores and 100% shareholding of JEKPL have been transferred to Invenire Energy on Sept 30, 2020 and its nominees have also been appointed as Directors on the Board of JEKPL.