KSS Limited has informed the Exchange regarding 'Intimation under Regulation 30 of SEBI (LODR) Regulations, 2015 regarding Order passed by Hon ble NCLT, Mumbai Bench in IA/4648/2023 under Section 43 of the Insolvency and Bankruptcy Code, 2016'.
Awaiting price reaction for this filing.
The NCLT Mumbai Bench has allowed an application by KSS Limited's Resolution Professional under Section 43 of the Insolvency and Bankruptcy Code, declaring two related-party transactions worth Rs. 47,92,646 as preferential. The transactions involved Rs. 39 lakh paid to K Sera Sera Miniplex Limited and Rs. 8.93 lakh paid to K Sera Sera Digital Cinema Limited in January 2022, both sister concerns of KSS Limited. The Tribunal found these payments were not in the ordinary course of business, were made within the two-year look-back period before CIRP initiation, and gave the related parties an unfair advantage over other creditors. The six suspended directors of KSS Limited have been ordered to jointly and severally repay Rs. 47.93 lakh along with interest at SBI PLR + 2% within 30 days. The Resolution Professional is now issuing demand notices and pursuing recovery for the company's creditors.
Positive for KSS Limited's creditors as it allows recovery of nearly Rs. 48 lakh for the insolvency estate. The order reinforces the Resolution Professional's position to claw back questionable related-party payments made before the company's insolvency, potentially increasing the asset pool available for creditor distribution. However, the company remains in CIRP since January 2023, so shareholders continue to face uncertainty about any recovery of equity value.