NCLAT Overrides NCLT on Educomp's Share Valuation Controversy

The National Company Law Appellate Tribunal (NCLAT) overturned a directive from the Delhi bench of the National Company Law Tribunal (NCLT) for a fresh valuation of shares owned by Educomp Solutions' subsidiary in The Learning Internet Inc. NCLAT stated that such matters were outside NCLT's jurisdiction.

The National Company Law Appellate Tribunal (NCLAT) has quashed a ruling from the Delhi bench of the National Company Law Tribunal (NCLT) seeking a fresh valuation of shares tied to Educomp Solutions' subsidiary, Educomp Asia Pacific Pte, in the U.S.-based firm The Learning Internet Inc.

The tribunal questioned the jurisdiction of the NCLT in this matter, asserting that the issues related to the share valuation were more appropriate for proceedings in Singapore, where Educomp's subsidiary is under liquidation. NCLAT emphasized that the NCLT's directive lacked authority since it intervened in an ongoing liquidation process overseas.

NCLAT's decision followed a petition from SBI Singapore, previously lending USD 20 million to Educomp's subsidiary. The bank contested NCLT's ruling, which sought fresh valuation in case the share value exceeded USD 7.10 million, potentially impacting the bank's secured claims.

(With inputs from agencies.)