In this case, in approved Resolution Plan, the public shareholding was 2.28%, however, in board resolution of new management, the public shareholding has been increased to 5% to comply Rule 19A (5) of the Securities Contracts (Regulation) Rules, 1957.
NSE objected regarding the variation of the public shares in respect of the approved plan and the board resolution and asked to provide a revised plan approved by NCLT considering the treatment of capital restructuring as per board resolution.
The Hon’ble NCLT held that:
(i) It was the duty of the RP to examine the resolution plan received by him to confirm that the plan or any part of the plan was not in violation of any existing laws in terms of Section 30(2)(e) of the I&B Code.
(ii) Mere failure to discharge the duty by RP in respect of verification of substantive rules of maintaining minimum 5% public shareholding in the plan, which is approved by this Adjudicating Authority, a resolution of the corporate debtor as well as the implementation of a resolution plan should not be jeopardized.
(iii) The modification sought in the resolution plan approved on 04.10.2023, is not for any change or modification of plan value or its distribution. The modification is in fact beneficial to the public shareholders at large.