By R. Ayappan
MARKETS regulator Securities and Exchange Board of India(SEBI) has restrained Hotel Lella Venture from concluding its asset sales to a fund sponsored by Canada's Brook field Asset Management in a Re.3,950 crore deal. SEBI's letter asking Leela to not take any action in the matter until further orders came just as the e-voting by shareholders on resolutions pertaining to asset sales was to end on 24(Wednesday).
The intervention has come about as ITC, a shareholder with close to 8 per cent stake in Hotel Leela Venture, and another shareholder, complained of oppression and mismanagement against the company."In view of the representations/allegations made by the two shareholders against the company to SEBI with respect to the Postal Ballnot Notice, SEBI has advised the company to ensure that none of the transactions proposed in the Postal Ballot Notice dated 18th March, 2019 are acted upon till further directions from SEBI, "the company said in a filing.
ITC has also separately moved the National Company Law Tribunal(NCLT) along with two applications, asking for urgent hearing and also waiver of 10 per cent shareholders as minimum threshold to have a say in the management decisions. ITC's has allaged that minority shareholder rights are being suppressed. It had also prayed for restraint on ITC and its lander JM Financial ARC from going ahead with sale of properties to Brookfield. NCLT will hear the matter on June 18.
Lella, which has debts of over Re.6,000 crore, has for some years been evaluating options for resolution, and JM Financial ARC, which had bought the bad debts from banks, had converted debt into 26 per cent equity holding. This also re sulted in ITC's holding in Leela to fall below 10 per cent.
As part of the deal cut debt, Lella decided to sell its Bangalore, Chennai, Delhi and Udaipur hotels and the property that it owns in Agra. Simultaneously, the promoters who own the Lella brand also decided to transfer the Leela brand to Bookfield for all hospitality businesses. JM Financial Limited acted as the exclusive financial advisor to HLVL for this transaction. ICT had held stake in EIH and Leela as an investment.
MARKETS regulator Securities and Exchange Board of India(SEBI) has restrained Hotel Lella Venture from concluding its asset sales to a fund sponsored by Canada's Brook field Asset Management in a Re.3,950 crore deal. SEBI's letter asking Leela to not take any action in the matter until further orders came just as the e-voting by shareholders on resolutions pertaining to asset sales was to end on 24(Wednesday).
The intervention has come about as ITC, a shareholder with close to 8 per cent stake in Hotel Leela Venture, and another shareholder, complained of oppression and mismanagement against the company."In view of the representations/allegations made by the two shareholders against the company to SEBI with respect to the Postal Ballnot Notice, SEBI has advised the company to ensure that none of the transactions proposed in the Postal Ballot Notice dated 18th March, 2019 are acted upon till further directions from SEBI, "the company said in a filing.
ITC has also separately moved the National Company Law Tribunal(NCLT) along with two applications, asking for urgent hearing and also waiver of 10 per cent shareholders as minimum threshold to have a say in the management decisions. ITC's has allaged that minority shareholder rights are being suppressed. It had also prayed for restraint on ITC and its lander JM Financial ARC from going ahead with sale of properties to Brookfield. NCLT will hear the matter on June 18.
Lella, which has debts of over Re.6,000 crore, has for some years been evaluating options for resolution, and JM Financial ARC, which had bought the bad debts from banks, had converted debt into 26 per cent equity holding. This also re sulted in ITC's holding in Leela to fall below 10 per cent.
As part of the deal cut debt, Lella decided to sell its Bangalore, Chennai, Delhi and Udaipur hotels and the property that it owns in Agra. Simultaneously, the promoters who own the Lella brand also decided to transfer the Leela brand to Bookfield for all hospitality businesses. JM Financial Limited acted as the exclusive financial advisor to HLVL for this transaction. ICT had held stake in EIH and Leela as an investment.
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