Cigarette-to-hotels company ITC Ltd has approached the National Company Law Tribunal (NCLT) against debt-ridden Hotel Leelaventure Ltd alleging oppression of its rights as a minority shareholder and mismanagement.
ITC filed the petition on Monday and also requested the NCLT for urgent hearing, Hotel Leelaventure said in a stock-exchange filing on Tuesday.
ITC is also seeking a waiver of the minimum threshold of 10% stake that the Companies Act, 2013 requires minority shareholders to hold in a company for being eligible to file a petition alleging oppression of their rights.
ITC held a 7.92% stake in Hotel Leelaventure at the end of March, stock-exchange data show.
The Mumbai bench of the NCLT will hear the matter on Wednesday.
The development comes a month after Canadian investment firm Brookfield Asset Management Inc. agreed to acquire four Leela hotels, its hospitality business, the Leela brand and one property in Agra for Rs 3,950 crore ($576 million). Hotel Leelaventure plans to use the amount to repay its debt of more than Rs 6,000 crore.
Multiple media reports said ITC has alleged that the deal with Brookfield was not in the interest of Hotel Leelaventure and its minority shareholders.
In February, JM Financial ARC Ltd had also dragged Hotel Leelaventure to the bankruptcy court after the hotel chain defaulted on its debt. JM Financial ARC owns a 26% stake in Hotel Leelaventure and a majority of its debt.
Brookfield declined to comment on the matter. An ITC spokesperson told VCCircle: "The matter is sub judice and, therefore, we would not like to comment."
However, a person familiar with the development said on the condition of anonymity that the matter could impact Brookfield's deal with Hotel Leelaventure. The person also said that ITC could be eyeing the Leela Mumbai hotel, which wasn't part of the Brookfield deal. The Canadian firm, however, has the right of first refusal if the Mumbai hotel is put up for sale.
ITC has held a stake in Hotel Leelaventure for more than a decade. Its stake is now worth about Rs 52 crore, based on Hotel Leelaventure's share price.
Kolkata-based ITC is India's biggest maker of cigarettes. It also has several other businesses, including consumer goods, paper and hotels. The company operates nearly 100 hotels across 70 cities, according to its website. It also owns a stake of about 15% in EIH Ltd, operator of the luxury Oberoi hotels.