NCLT refuses to grant an interim relief to IFFCO

The National Company Law Tribunal (NCLT) has refused to grant an interim relief to Indian Farmers Fertiliser Cooperative (IFFCO) in a petition filed against Swan Energy and their joint venture firm Triumph Offshore (TOPL) from issuing security to lenders against loans.

In its order on Thursday, the tribunal’s Ahmedabad bench said that no relief would be granted as IFFCO (the applicant) was also a director on the board of TOPL. NCLT, which also directed IFFCO to file a rejoinder within seven days, also asked TOPL to convene a board meeting before the next hearing and discuss the issues.

NCLT is slated to hear the petition again on April 4.

TOPL is a joint venture between IFFCO and Swan Energy, with the latter holding the majority 51% stake. It was established to set up a floating storage and regasification unit, a special floating vessel equipped for LNG storage.

In its petition, IFFCO had alleged that TOPL is pre-paying the debt that would result in the dilution of its holding in the joint venture firm, which is “detrimental” to its interest. The petition, filed earlier this month, also cited “oppression and mismanagement”.

IFFCO, in the petition filed earlier this month, had stated that TOPL had taken a term loan of Rs 1,604 crore from a consortium of lenders, out of which Rs 500 crore was sanctioned by the State Bank of India. For the loan, the entire equity of IFFCO in TOPL was pledged with the lenders.

IFCCO also stated that Swan Energy was planning to raise more than Rs 1,400 crore through a preferential issue to a foreign entity, while TOPL sought approvals for a rights issue to Swan Energy to replace its bank loan with a promoter loan. IFFCO said that it had funds of over Rs 400 crore and there was no need to raise additional capital.

Swan Energy and TOPL had challenged the maintainability of IFFCO’s petition and alleged that the petition was filed with mala fide and malicious intent.