An Essel Group entity, Konti Infrapower and Multiventures, has filed a petition with the National Company Law Tribunal (NCLT), Mumbai, against Kotak Asset Management Company (AMC), alleging failure to repay ₹12.99 crore under a 2019 agreement tied to non-convertible debentures (NCDs) backed by Zee Entertainment shares.
What Sparked the Legal Battle?
The dispute stems from a ₹20 crore NCD deal in which Kotak AMC subscribed to debentures issued by Essel Group entities. As part of a related transaction, Konti Infrapower advanced ₹12.99 crore to Kotak AMC, with repayment contingent on:
- Completion of SEBI’s annual inspection of Kotak AMC (April 2019–March 2020)
- Full repayment to unit holders under the NCDs
While SEBI’s inspection report was finalized on March 28, 2023, and Kotak AMC reportedly repaid its investors, Konti claims the ₹12.99 crore remains unpaid despite multiple reminders.
Kotak AMC’s Defense: “Not a Debt, But a Security Deposit”
Represented by senior advocate Gaurav Joshi, Kotak AMC has contested the maintainability of the petition, arguing that:
- The amount in question was a security deposit, not a financial debt
- As a financial service provider, Kotak AMC is excluded from IBC proceedings under current law
What’s Next?
The matter is sub judice, with the next hearing scheduled for July 10, 2025. If the tribunal admits the plea, it could set a precedent for how financial service providers are treated under insolvency law.
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