Return Rs 148 crore to insolvent Siti Networks, NCLT orders lenders

The National Company Law Tribunal (NCLT) has ordered Axis Bank and other financial creditors of bankrupt Siti Networks to repay the company Rs 143 crore. Siti Network, part of the Essel Group, is undergoing insolvency proceedings.

The tribunal stated, “All transactions and appropriations undertaken during the stay period from March 7,2023 to August 10, 2023 shall be reversed and the amounts must be remitted back to the corporate debtor’s account within four weeks.”

The bench comprising judicial member Lakshmi Gurung and technical member Charanjeet Singh Gulati also confirmed that the Insolvency Commencement Date for Siti Networks remains February 22.2023, and all insolvency related activities should be considered from that date.

After taking over the company’s operations in August 2023, resolution professional (RP) Rohit Ramesh Mehra found that Axis Bank had withdrawn funds from Siti and distributed about Rs 143 crore to various other lenders, including while the stay was in effect. These lenders included IndusInd Bank, RBL Bank, Aditya Birla Finance, and IDBI Bank.

This directive from the Mumbai bench of the tribunal followed an application from the Asset Reconstruction Company (India), a financial creditor of Siti, which argued that some creditors withdrew funds while the company was under moratorium and during a stay on its insolvency proceedings.