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Leading fertiliser cooperative Iffco has withdrawn its petition filed before National Company Law Tribunal (NCLT) in which it had sought to restrain Triumph Offshore Private Limited (TOPL) and Swan Energy from passing any board resolution without its approval and issuing shares to the lenders against loan.
Iffco — Indian Farmer Fertiliser Cooperative Limited — recently exited TOPL by selling its 49 per cent stake to Swan Energy for Rs 440 crore.
In March, it had moved the NCLT’s Ahmedabad bench against its JV partner Triumph Offshore, a subsidiary of Swan Energy Ltd (SEL), to restrain them from passing any board resolution without the prior written approval of petitioner (Iffco), with reference to the substitution of the bank term loan with promoters loan or from issuing any shares/security or any instrument convertible into equity in favour of R2 (SEL) or any third party, which may result into diluting shareholding of the petitioner.
The tribunal on March 7 turned down the plea made by Iffco to grant certain reliefs it had sought.
The bench had said no relief would be granted as the applicant (Iffco) was also a director on the board of Triumph Offshore. Noting that the respondents, Swan Energy and Triumph had filed replies to the petition, the court directed Iffco to file a rejoinder within seven days.
The court had also directed Triumph Offshore to convene a board meeting before the next hearing and “discuss the issues raised regarding feasibility and viability of offering of services to operate vessels and the inclusion of the applicant in the committee” as per the memorandum of association.
Triumph Offshore and SEL filed affidavits in response, challenging the maintainability of Iffco’s petition and seeking that no relief should be granted to Iffco.
The two companies said in their respective affidavits that the Iffco petition was “frivolous, an abuse of the process of law” and further that Iffco had failed to make out any case of oppression and mismanagement with respect to the affairs of Triumph Offshore.
Background
Triumph Offshore was a joint venture between Iffco, holding 49 per cent, and Swan Energy, which held the majority stake. This partnership was formed to establish a floating storage and regasification unit (FSRU), a specialized vessel equipped with LNG storage tanks and the necessary vaporization process equipment.
Iffco alleged in its plea that there was mismanagement and oppression by Triumph Offshore.
The petition claimed that the JV was issuing securities to Swan Energy to pre-pay debt, which would dilute Iffco’s stake in the JV and harm its interests. It also stated that Triumph Offshore had arranged a loan of over Rs 1,600 crore with banks, including Rs 400 crore from the State Bank of India.
The plea also said that the JV had not taken any steps to charter any floating storage regasification unit (FSRU).
In their responses, both Swan Energy and Triumph Offshore indicated that all decisions were made with Iffco’s knowledge, as its directors were also on the JV’s board. Swan Energy explained that delays in securing a charter for the FSRU were due to factors such as cyclones and COVID-19, but they eventually secured a one-year charter with a Turkish company.
The decision to raise funds through an inter-corporate loan and a rights issue was made when the charter was nearing its expiration and to pre-pay outstanding debt, they said. The affidavit described this as “purely an economic decision made out of commercial probity and in the interests of the company.”
Both respondents accused Iffco of being a passive investor in the JV with no direct financial obligations to lenders.
First Published: Jun 28 2024 | 9:27 PM IST