Fight for Appu Hotels rages as MGM moves NCLAT

CHENNAI: Two days after the National Company Law Tribunal (NCLT) spurned his Rs 423-crore bid to take over Appu Hotels, which owns the iconic Le Royal Meridien in Chennai, MGM Healthcare chairman MK Rajagopalan moved the appellate tribunal against the order.

Noting that it found that there are “arguable points” in the appeal, the National Company Law Appellate Tribunal at Chennai said on Friday posted the matter for further hearing on January 12, and added that the proceeding arising out of tribunal’s order would be subject to the final outcome of the appeal.

The COVID pandemic and the prolonged lockdowns had severely affected Appu Hotels’ finances, forcing it into the NCLT framework.

On December 20, the division bench of the NCLT, Chennai, accepted the settlement proposal put forth by Palani G Periasamy, and directed the termination of the corporate insolvency resolution process against Appu Hotels Limited (AHL), and restored the rights and management of Appu Hotels to its original board of directors with immediate effect.

The resolution professional was discharged from duty and was also told to hand over all the past reports and accounts to the board.

When the appeal came up for hearing before judicial member Justice Rakesh Kumar Jain and technical member Shreesha Merla, advocate T Ravichandran who appeared for the resolution professional (RP) pointed out that the tribunal had discharged the RP from all responsibilities.

Meanwhile, senior counsels PH Arvind Pandiyan (for Periasamy) and OM Prakash (for the committee of creditors) argued that the appellant deliberately did not implead them as party to the petition. Following the appellant’s oral request, the bench said Periasamy and the committee of creditors (CoC) were necessary parties to the appeal and issued notice to them.

“Counsel for the CoC has submitted that the amount has been paid to the creditors and management has been handed over… Be that as it may, till the next date of hearing, proceeding arising out of the impugned order shall be subject to the final outcome of this appeal,” the bench said, and posted the matter for further hearing on January 12.

The battle for the control of the marquee properties, including Le Royal Meridien in Chennai and a five-star hospital in Coimbatore, which began when the tribunal admitted the petition filed by Tourism Financial Corporation of India, had seen several twists and turns after Rajagopalan entered the fray to take over Appu Hotels with the Rs 423-crore bid.

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