NCLAT Upholds Reliance Broadcast Sale to Sapphire Media

New Delhi, Dec 23 (PTI) The NCLAT on Monday set aside a batch of appeals filed against the NCLT order approving bids of Sapphire Media for Reliance Broadcast Network Ltd.

The National Company Law Appellate Tribunal (NCLAT) upheld the order of the Mumbai Bench of the NCLT, which had on May 6, 2024 approved the resolution plan of Sapphire Media for Reliance Broadcast that operated FM radio business under the brand name of Big 92.7 FM.

The order passed by the National Company Law Tribunal (NCLT) was challenged by the unsuccessful resolution applicants -- Abhijit Realtors & Infraventure and Creative Channel Advertising & Marketing -- by filing a batch of five appeals before NCLAT.

The petitioners had alleged irregularity in the process adopted by the resolution professional of Reliance Broadcast Network Ltd (RBNL), which was rejected by the appellate tribunal.

"We have already found that the challenge mechanism as well as negotiation conducted by the resolution professional is in accordance with the CIRP Regulations and Process Note," NCLAT said.

Moreover, evaluation of the eligibility of the successful bidder Sapphire Media also suggested there is no irregularity committed by the RP and that it "does not find any tenable ground" raised by them to interfere with the order approving the resolution plan.

"....we do not find any ground to interfere in the order dated May 6, 2024 impugned in the above Appeals. In result, all the appeals are dismissed," it said.

The Corporate Insolvency Resolution Process (CIRP) was initiated against Reliance Broadcast Network by NCLT on February 24, 2023 on an application filed by IDBI Trusteeship Services, a financial creditor of the company.

The RP received six resolution plans, where Abhijit Realtors & Infraventure submitted a bid of Rs 80.20 crore, Creative Channel Advertising & Marketing gave a bid of Rs 100 crore, Entertainment Network (India) of Rs.37.17 crore and Sapphire Media Ltd of Rs 104.28 crore.

The Committee of Creditors (CoC) decided to hold the challenge process as per the RFRP (Request-For-Resolution-Plan) and a base price of Rs 240 crore was set.

At the end of each round, the bid with the highest value was the "Threshold Bid Amount" for the next round. The resolution applicant was required to either match or exceed the threshold bid amount for the respective round in order to continue participating in the challenge process.

Each incremental bid of the resolution applicants was to be in multiples of Rs 10 crore. In the third round, Sapphire Media submitted a bid of Rs 251 crore, which was the highest.

After this, the CoC decided to undertake further negotiations with all resolution applicants as per the RFRP and to put their best offers and submit revised financial proposal.

On November 4, 2023, revised financial proposals were received from Consortium of Abhijit Realtors & Infraventure and ENIL (formed during the challenge round) of Rs 248 crore, Rs 240 crore from Creative Channel Advertising & Marketing, and Rs 261 crore from Sapphire Media.

The bid of Sapphire Media was approved by CoC with 88.97 per cent vote and was forwarded to NCLT, which approved it.

However, it was alleged that Sapphire Media was ineligible to submit its resolution plan and questioned the challenge process before NCLAT and it was rejected.