NCLT asks creditors of Siti Networks to reverse Rs 143 cr transaction

A financial creditor of Siti argued that some creditors withdrew funds while the company was under moratorium and during a stay on its insolvency proceedings

by e4m Staff
Published: Oct 3, 2024 9:42 AM | 1 min read

The National Company Law Tribunal (NCLT) has ordered financial creditors of Siti Networks to reverse transactions amounting to Rs 143 crores that were made from the company’s account to certain lenders.

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.

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 (ICD) for Siti Networks remains February 22, 2023, and all insolvency-related activities should be considered from that date.

Siti was admitted to the Corporate Insolvency Resolution Process (CIRP) in February 2023, with Rohit Mehra appointed as the Resolution Professional. Following this, the order was challenged by a suspended director of Siti at the National Company Law Appellate Tribunal (NCLAT). On March 7, 2023, the appellate tribunal stayed the insolvency proceedings, returning control to the company's directors.

However, the NCLAT later dismissed the suspended director's appeal, ruling it without merit. This order was subsequently challenged at the Supreme Court but was ultimately dismissed.