KOLKATA: Promoters of Nicco Corporation, which is now under liquidation, have lost their rights to be in the board of another group company, Nicco Parks & Resorts Ltd (NPRL).

This is according to a National Company Law Appellate Tribunal verdict which said the promoters’ rights to be on board are transferable, and upheld a National Company Law Tribunal’s bench order asking them to vacate their position on the board. The appellate body hears appeals against the orders passed by NCLT.

“Looking from any point of view, the appeals san merits and accordingly, they are dismissed,” the the appellate court said. The three-member NCLAT bench in Delhi passed its judgement on Friday.

Nicco Corp’s 25% stake in NPRL is on sale as part of Nicco Corp’s liquidation exercise, which begun in October 2017, but had failed to enthuse investors due to lack of clarity on gaining board position.

Nicco Corp promoter Rajive Kaul and his daughter Pallavi Priyadarshini have been Nicco Corp’s nominee directors at NPRL on the ground of the 25% shareholding.

“The NCLAT on Friday opened the door for prospective buyers. The NCLAT held that Rajive Kaul and Pallavi Kaul must vacate their positions on the board of Nicco Parks. The NCLAT order has also said that the rights of nomination to the board, would transfer to the buyer,” said Vinod Kothari, the liquidator appointed for Nicco Corp.

NCLAT has given the liquidator the power to appoint directors in their place.

“This will encourage prospective buyers who may want to come as joint-sector partners in NPRL. We hope this will increase the bidders’ interest and will add value to the shares,” Kothari said.

State Bank of India has a Rs 112 crore exposure to Nicco Corp, while Allahabad Bank has Rs 95 crore. Other lenders to Nicco Corp are Canara Bank (Rs 44 crore), Asset Reconstruction Company (India) Ltd (Rs 27 crore), Srei Infrastructure Finance (Rs 24 crore) and Central Bank of India (Rs 20 crore).

The three major assets of Nicco Corp are the shareholding in NPRL, its Shyamnagar plant and a part of Nicco House, which is occupied by the promoters.

Since October 2017, only about 17% of the claim by Nicco Corp’s workers and lenders has been met by sale of assets in parcels, against the primary intention of a slump sale, which means selling of all assets as a single unit.

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