SEPCO, a creditor, opposed a scheme proposed by TSPL, alleging that the company had concealed material information about its liabilities. Specifically, SEPCO claimed that TSPL owed it approximately 1,251 crore Indian rupees, a debt that was acknowledged in TSPL’s financial statements since 2019. However, this liability was not included in the list of creditors presented in the scheme. SEPCO argued that this omission was deliberate and intended to exclude it from creditor meetings and thereby prejudice its rights.
SEPCO’s counsel highlighted that the debt arose from a consent award dated May 21, 2016, and was reflected in TSPL’s balance sheets. Therefore, it contended that the exclusion of this liability would distort TSPL’s valuation and negatively impact its net worth post-demerger. In essence, SEPCO is claiming that TSPL’s attempt to exclude the debt from its creditor list is an attempt to misrepresent its financial situation and unfairly treat its creditor.
This dispute highlights the importance of transparency and accuracy in financial reporting, especially in the context of corporate restructuring and delisting. If SEPCO’s claims are valid, it may have significant implications for the valuation of TSPL and the proposed scheme. The dispute also underscores the need for effective oversight and regulation to ensure that companies do not engage in deceptive practices to the detriment of their creditors.