Adani Power-led Consortium's Acquisition of Coastal Energen Temporarily Suspended by NCLAT

The National Company Law Appellate Tribunal (NCLAT) in Chennai has temporarily halted the acquisition of Coastal Energen by a consortium led by Adani Power. This decision follows appeals from Ahmed Buhari, a suspended director of Coastal Energen, and shareholders Precious Energy Holdings and Mutiara Energy Holdings. They contested the takeover, arguing that due process was not followed and that the consortium was a sham.

The NCLAT has ordered that Coastal Energen's power plant in Thoothukudi, Tamil Nadu, will continue to be managed by the Interim Resolution Professional until the next hearing on September 18.

Coastal Energen, established in 2004, is the power generation subsidiary of the Coal & Oil Group, which was founded by Ahmed Buhari in the 1980s. The company operates a significant coal-based thermal power plant in Thoothukudi, Tamil Nadu.

Last week, Adani Power Ltd. consortium, in which Adani Power holds 49% stake, completed the acquisition of Coastal Energen Pvt. for Rs 3,330.88 crore, which was part of a resolution plan approved by the National Company Law Tribunal (NCLT).

Ahmed Buhari, a suspended director of Coastal Energen, along with shareholders Precious Energy Holdings and Mutiara Energy Holdings, filed appeals against the. . They argued that the due process was not followed during the takeover.

The appellants claimed that the consortium led by Adani Power was a sham and that the acquisition process lacked transparency.

To ensure the smooth operation of Coastal Energen’s power plant in Thoothukudi, Tamil Nadu, the NCLAT has decided that the plant will continue to be managed by the Interim Resolution Professional until the next hearing.

The next hearing is scheduled for September 18, where further deliberations will take place.

Corona scare: NCLAT to hear only "urgent matters"

As a precautionary measure against the coronavirus outbreak, the National Company Law Appellate Tribunal (NCLAT) has restricted itself to hear only "urgent matters" till April 1 and has extended operation of all interim orders and stay passed in the pending matters till their next hearings.

All the matters listed for hearing during the aforesaid period “shall stand adjourned and date of hearing would be noti?ed later," said the latest notice from NCLAT.

"Interim order/stay order passed in the pending matters shall continue till the next date of hearing,” it said.

Announcing the precautionary measures, NCLAT said: ”Premises of this Appellate Tribunal shall remain locked during the aforesaid period except for the days when the Bench will meet for hearing urgent matters upon mentioning.”

"All judges, members and the staff members shall stay indoors/ con?ned to their residences, but shall not leave the Headquarters and shall be available/ accessible at short notice as and when their services are required,” said a notice issued by NCLAT registrar dated March 20.

NCLAT has constituted a special bench, which would sit only on March 25 and April 1 to hear the urgent matters after mentioning.

"Filing counter shall also remain closed and matters before the Bench to hear urgent matters will be listed only upon mentioning on the aforesaid dates,” it said adding that the situation will be reviewed on April 1, 2020, and further instructions will be issued.

In an earlier notice, NCLAT had adjourned all its scheduled hearings in March, however, urgent matters, which required immediate attention was to be mentioned before the acting Chairperson Justice Bansi Lal Bhat.

It has also said that the insolvency-related matters, which are dealt in a time-bound manner, would be heard by the bench during the period, but the bench would function only till 1 pm. The filing office would accept petitions till 1:00 PM, it added.

The NCLAT was constituted under Section 410 of the Companies Act, 2013 for hearing appeals against the orders of National Company Law Tribunal (NCLT). It is also the appellate tribunal for hearing appeals against the orders passed by NCLT under the IBC and Insolvency and Bankruptcy Board of India.

It is also the Appellate Tribunal to hear and dispose of appeals against any direction issued or decision made or order passed by the Competition Commission of India (CCI). PTI KRH