InvestorQ : Can you tell me about the recent proposal of Venugopal Dhoot to pay Rs.30,000 crore as full settlement for dues of Videocon?
Neelam Naik made post

Can you tell me about the recent proposal of Venugopal Dhoot to pay Rs.30,000 crore as full settlement for dues of Videocon?

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Anu Biswas answered.
4 weeks ago
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There seems to be a new trend in NCLT proceedings. In fact, a few days after Kapil Wadhawan made an offer to buy back Dewan Housing from the NCLT at a huge discount; Venugopal Dhoot has come up with a similar proposal to settle all of Videocon group dues at Rs.31,000 crore.

This is purported to be a full and final settlement of all dues pertaining to 13 out of the 15 Videocon group companies that are currently in the midst of NCLT proceedings. For the government it offers a resolution but there are multiple considerations here.

One way is to look at this case purely by the book. The question that arises is if Venugopal Dhoot had the money, why did he not pay the banks or at least try and negotiate a settlement. That surely sounds unethical. On paper, the NCLT is not too inclined towards such an arrangement as we saw them rejecting such an interjection from Essar.

The argument of the NCLT in such cases has traditionally been that it would set a bad precedent and encourage more of the promoters to strike such one-sided deals. That is a valid argument but today the conditions have changed a lot and it may take quite some time for NCLT to contribute something meaningful.

For banks this does look more palatable than outright default, which can be a long drawn process. But we must also look at the case pragmatically. You must remember that NCLT cases are currently in a state of abeyance and it may be quite some time before any meaningful solution can come about for most of the pending cases.

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