NCLAT has reportedly ruled in favour of FMCG major Hindustan Unilever Limited (HUL) while hearing an alleged insolvency plea filed by an operational creditor
The petition, filed by Lalithambica Enterprises, accused HUL of breaching the Insolvency & Bankruptcy Code (IBC)
The judgement came on Monday (27 January)
The National Company Law Appellate Tribunal (NCLAT) has reportedly ruled in favour of FMCG major Hindustan Unilever Limited (HUL) while hearing an alleged insolvency plea filed by an operational creditor.
According to an Economic Times report, petitioner Lalithambica Enterprises accused HUL of breaching the Insolvency & Bankruptcy Code (IBC).
On Monday (27 January), the appellate tribunal upheld an order, liberating HUL from the allegations.
Both the companies had running accounts from 2008 to 2018.
Lakshmi Narayana, the promoter of Lalithambica Enterprises, filed the plea on the ground of Corporate Insolvency Resolution Process (CIRP). As per IBC, the minimum limit of default is INR 1 Cr for initiation of this process.
The creditor claimed that HUL owes 24% interest on the principal amount of INR 59 Lakh to the enterprise. With the due interest, the amount will exceed INR 1 Cr.
However, in 2024, the Mumbai bench of the National Company Law Tribunal (NCLT) discovered that the sum of the invoices was less than the threshold limit. The observation was larer challenged before the NCLAT.
The development comes at a time when HUL recently signed an agreement to acquire D2C brand Minimalist in an INR 2,670-Cr deal. With this infusion, the FMCG major will acquire 90.5% stake in Minimalist’s parent company. Later, it will invest INR 45 Cr over the course of two years to acquire the remaining 9.5% stake.
Back in 2022, HUL also acquired two D2C nutrition brands – OZiva and Wellbeing Nutrition – by infusing INR 334.28 Cr in tranches.