The Chandigarh Bench of the National Company Law Tribunal (NCLT) on Tuesday withheld its sanction for the merger of NAM Estates Private Ltd. (NAM Estates) and Embassy One Commercial Property Developments Private Ltd. (Embassy One) with Indiabulls Real Estate Limited (IBREL).
It is pertinent to note that the merger already stands sanctioned by NCLT’s Bengaluru Bench, which has jurisdiction over NAM Estates and Embassy One, on April 22, 2022. However, the NCLT, Chandigarh Bench, which has jurisdiction over IBREL, had earlier raised certain concerns based on the objections cited by the Income Tax department to the merger, IBREL said in a regulatory filing.
“IBREL strongly believes that these objections and concerns were unfounded, unjustified.. The company will await the detailed order to further evaluate the next steps and shall explore all options, including filing an appeal against the order,” the firm added.
“It is pertinent to note that the merger has already received overwhelming support from 99.9987% of shareholders who voted on the same and has also received approval from other regulators,” IBREL further said.
Bengaluru-based Embassy Group’s Chairman, Jitu Virwani said all necessary details and clarifications sought by the NCLT regarding the details of NAM Estates and Embassy One were meticulously furnished. “Yet, NCLT Chandigarh Bench has taken an extreme step of not approving the merger,” he added.
Embassy Group, being the largest shareholder in IBREL, was committed to the creation of one large platform and would continue to explore all possible options towards it, Mr. Virwani added.
Following the development, shares of Indiabulls Real Estate fell 19% to hit a low of ₹56.10 on the BSE.
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