NCLT directs lenders to refund Rs 148 Cr to the insolvent Siti Networks

An insolvency tribunal has directed Axis Bank and other financial creditors of bankrupt Siti Networks to repay the company ₹143 crore. Siti Network, part of the Essel Group, is undergoing insolvency proceedings. The tribunal’s order is based on a petition filed by Asset Reconstruction Company (India) Ltd, one of the creditors, which alleged that certain other creditors had unlawfully withdrawn funds from Siti while a stay on the insolvency proceedings was in effect.

The insolvency proceedings against Siti began on February 22, 2023, after IndusInd Bank petitioned the NCLT over an alleged default of ₹148 crore. After the NCLT admitted the company into insolvency, Shilpi Asthana, one of the suspended directors of Siti, challenged order in the NCLAT in Delhi. In an interim order on March 7, 2023, the NCLAT in effect stayed the insolvency proceedings against the company, and Siti was handed back over to the directors of the company. However, after hearing the matter in detail, NCLAT concluded that Asthana’s appeal lacked merit and dismissed it. Asthana challenged this order in the Supreme Court but the apex court dismissed it, too.

As of September 5, the financial and operational creditors had filed claims against Siti Networks totalling ₹1,206 crore.
BCS Bureau