In a significant development for Hindusthan National Glass & Industries Ltd (HNG), the National Company Law Tribunal (NCLT) has directed the company's former promoters to return ₹42.46 crore within two months, citing fraudulent transactions. The ruling comes alongside the approval of a substantial resolution plan for the debt-ridden company.

Fraudulent Transactions Uncovered

The Kolkata bench of the NCLT found that certain transactions were made to defraud creditors. As a result, it has ordered criminal prosecution against suspended directors Sanjay Somany and Mukul Somany under Section 69 of the Insolvency and Bankruptcy Code (IBC).

A transaction audit conducted by BDO India revealed three potentially fraudulent transactions totaling ₹63.34 crore between 2019-20 and 2021-22:

The tribunal's investigation found that Durvish Vyapaar had no valid office, invoices, or procurement evidence, leading to the order for repayment of the ₹42.46 crore within a two-month timeframe.

Resolution Plan Approved

Amidst these developments, the NCLT has approved a resolution plan for HNG, marking a potential turnaround for the company. Key points of the resolution include:

• Total investment: ₹2,250 crore
• Successful bidder: Independent Sugar Corporation Ltd (INSCO)
• New controlling entity: Madhvani Group

The company entered resolution proceedings in October 2021, and the approved plan is set to transfer control to the Madhvani Group after a 45-day monitoring phase.

Post-Resolution Developments

According to the latest LODR (Listing Obligations and Disclosure Requirements) filing, the Monitoring Committee of HNG has approved several key measures as part of implementing the resolution plan:

1. Authorization to file forms for initiating Standalone Capital Reduction.
2. Increase in Authorized Share Capital from ₹511.50 crore to ₹1,000 crore.
3. Consequent alterations to the company's Memorandum of Association.

These steps indicate the company's progress in restructuring its capital and governance framework in line with the approved resolution plan.

The NCLT's dual action of ordering repayment of fraudulent transactions and approving a comprehensive resolution plan represents a critical juncture for HNG. As the company moves forward under new management, stakeholders will be closely watching the implementation of these directives and the potential for HNG's revival in the glass manufacturing sector.

Hindusthan National Glass & Industries Limited (HNGIL) has announced significant developments in its corporate restructuring process. The company's Monitoring Committee has approved several key measures as part of the ongoing acquisition by Independent Sugar Corporation Limited (INSCO).

Capital Reduction and Share Capital Increase

The Monitoring Committee has authorized the filing for standalone capital reduction with statutory authorities. This move is a crucial step in restructuring the company's financial position. Additionally, the committee has approved an increase in the company's authorized share capital from Rs. 511.50 crores to Rs. 1,000.00 crores. This substantial increase provides HNGIL with greater flexibility in its financial structure.

Memorandum of Association Changes

In line with the increase in authorized share capital, the committee has also approved consequent alterations to the company's Memorandum of Association. These changes are necessary to reflect the new capital structure of the company.

Alignment with NCLT-Approved Resolution Plan

These decisions align with the resolution plan approved by the National Company Law Tribunal (NCLT) for INSCO's acquisition of HNGIL under the Corporate Insolvency Resolution Process (CIRP). The CIRP, conducted under the Insolvency and Bankruptcy Code, 2016, culminated in the NCLT's approval of INSCO's resolution plan on August 14.

ISIN Suspension and Record Date

As part of the acquisition process, HNGIL has set September 18 as the record date for suspending its existing International Securities Identification Number (ISIN) INE952A01022. This suspension is a critical step in implementing the approved resolution plan and facilitating the acquisition by INSCO.

Implications for Shareholders

The capital reduction, increase in authorized share capital, and ISIN suspension are likely to have significant implications for HNGIL's shareholders. These changes indicate a substantial restructuring of the company's share structure and ownership. Shareholders are advised to closely monitor further announcements from the company regarding any actions they may need to take.

Company Listing Information

HNGIL's shares are listed on the following exchanges:

Stakeholders and investors should stay informed about additional announcements from the company or regulatory bodies regarding the ongoing acquisition process and its implications for HNGIL's future operations and share structure.