The Bengaluru bench of the National Company Law Tribunal (NCLT) has quashed MTR Foods’ charge against Maiyas Beverages and Foods that the latter fraudulently sold its restaurants subsidiary in an undervalued transaction a month before the corporate insolvency resolution process (CIRP) for Maiyas began.
MTR had also alleged that Maiyas founder Sadananda Maiya had illegally assigned the rights of the Maiyas brand to Maiyas Restaurants. MTR alleged that the total consideration for the restaurant sale and assignment of the brand was Rs 1.5 crore, while the assets and turnover of Maiyas Restaurants were Rs 14.5 crore and Rs 33 crore respectively.
MTR was among the bidders for Maiyas. The bid was finally won by Akashika Foods, a firm formed by employees of Maiyas and backed by Sadananda Maiya. Akashika had submitted a Rs 130-crore plan to revive the beleaguered Maiyas.
Maiyas’ committee of creditors led by Karnataka Bank had opposed MTR’s application against Maiyas. Karnataka Bank and ICICI Bank have an exposure of Rs 77 crore and Rs 3 crore respectively to Maiyas Beverages and Foods.
When TOI contacted Sadananda Maiya, he said he was happy that the NCLT had taken note of the transaction involving hiving of Maiyas Restaurants from Maiyas Beverages and Foods and had recorded the legal framework within which the transaction was entered into.
Maiyas had to scale back its operations last year due to lack of funds. Subsequently, with serious differences emerging between Maiya and the PE firms that funded it, the company had to be referred to the tribunal.
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