Reliance Industries' Resolution Plan Approved in Alok Industries Insolvency Case

The Adjudicating Authority approved the Resolution Plan of the Appellant, 'Reliance Industries Limited,' in the Corporate Insolvency Resolution Process of 'Alok Industries Ltd.' The plan included conditions on various aspects such as potential amendments to laws, delisting of shares, related party transactions, and compliance with applicable laws. The Authority clarified issues raised in Interlocutory Applications, partially allowing one and not passing a specific order on another. The dispute regarding the exemption from delisting of shares based on SEBI's permission was addressed, with SEBI emphasizing compliance with Delisting Regulations and specified conditions for exemptions. Compliance with the approved resolution plan and SEBI's stand on Delisting Regulations were upheld.

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Issues:
1. Approval of Resolution Plan by Adjudicating Authority
2. Conditions in the Resolution Plan
3. Interlocutory Applications filed by the Appellant
4. Exemption from delisting of shares
5. Stand of SEBI regarding delisting regulations

Analysis:

1. The judgment pertains to the approval of the Resolution Plan of the Appellant, 'Reliance Industries Limited,' by the Adjudicating Authority in the Corporate Insolvency Resolution Process of 'Alok Industries Ltd.' The plan was approved by the Committee of Creditors and subsequently by the National Company Law Tribunal, Ahmedabad Bench. The Resolution Plan included various conditions that were to be adhered to by the Resolution Applicant.

2. The Resolution Plan included conditions related to potential amendments or exemptions from laws that may arise before the Closing Date. These conditions covered various scenarios such as delisting of shares, related party transactions, reclassification of promoters, public shareholding requirements, debt assignment, fair value determination, and reduction of capital. The plan also addressed the treatment of stakeholders and the requirements for compliance with applicable laws.

3. The Appellant filed Interlocutory Applications seeking concessions for delisting in accordance with applicable laws. The applications raised concerns regarding the need for specific orders related to Face Value Reduction and Promoter Capital Reduction, which were clarified by the Adjudicating Authority. One application was partially allowed, while no specific order was passed on the other.

4. The Appellant raised an issue in the appeal concerning the exemption from delisting of shares based on SEBI's permission dated 31st May, 2018. The Adjudicating Authority's order dated 26th July, 2019 did not address this issue specifically, leading to a dispute regarding the applicability of SEBI's Delisting Regulations.

5. SEBI, as the 3rd Respondent, clarified its stand on the applicability of the Delisting Regulations in the case. SEBI highlighted the provisions of the regulations, emphasizing that exemptions from delisting regulations are subject to specific conditions outlined in Regulation 3(3). SEBI stated that delisting in cases under the Insolvency and Bankruptcy Code should comply with the specified procedures or provide an exit option to existing public shareholders at a specified price in the resolution plan.

In conclusion, the judgment directed the Resolution Applicant to comply with the approved resolution plan and the clarification/modification provided regarding the delisting of shares. The stand taken by SEBI regarding the applicability of Delisting Regulations was upheld, emphasizing the need for compliance with the specified conditions for exemptions.

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