Despite being approved by the NCLT-Bengaluru bench, the merger of NAM Estates and Embassy One Commercial Property Developments with Indiabulls Real Estate (IBREL) has been delayed by the NCLT-Chandigarh court. Due to concerns made by the NCLT-Chandigarh in relation to Income Tax department objections to the merger, IBREL addressed the complaints and sought to appeal the verdict. IBREL's board will meet to examine the next steps even though the merger has already gained backing from shareholders and clearance from other regulators.
Indiabulls Real Estate (IBREL) has announced that the National Company Law Tribunal (NCLT)-Chandigarh bench has halted the merger of NAM Estates and Embassy One Commercial Property Developments (Embassy One) into IBREL. 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 has strongly denied that these objections and concerns were justified and had addressed them before the NCLT. The merger had already received approval from 99.9987% of its shareholders who voted on the same and had also received approval from other regulators, including the Competition Commission of India. The merger, if approved, will result in the creation of one large platform, with the Embassy Group remaining the largest shareholder in IBREL.
The combined IBREL entity, which has 80.8 million sq ft of launched and planned development potential, will be renamed Embassy Developments and will be co-headquartered in Mumbai and Bengaluru. The merger has already been sanctioned by the NCLT-Bengaluru bench, which has jurisdiction over NAM Estates and Embassy One. IBREL has indicated that it will await the detailed order to further evaluate the next steps and shall explore all options, including filing an appeal against the order of the NCLT-Chandigarh bench, before the National Company Law Appellate Tribunal (NCLAT) at the earliest.
IBREL is a leading real estate company in India that develops commercial and residential projects in various cities across the country. The Embassy Group, on the other hand, is a prominent developer of commercial and residential properties in India with a portfolio that includes office spaces, malls, hotels, and residential complexes. The merger between the two companies has been in the works since August 2020, when NAM Estates and Embassy One Commercial Property Developments entered into a definitive merger agreement to amalgamate their ongoing, completed, and planned residential and commercial projects with Indiabulls Real Estate.
Indiabulls has been involved in several legal battles in the past. One of the most high-profile cases was in 2019 when it was accused of misappropriation of funds by a public interest litigation (PIL) in the Delhi High Court. The PIL alleged that Indiabulls had siphoned off ?98,000 crore ($13.5 billion) from National Housing Bank (NHB), which was later dismissed by the Court.
In 2020, Indiabulls Housing Finance had approached the Supreme Court against a petition filed by a Mumbai-based investor alleging misappropriation of funds by the company's promoters. The Supreme Court had ordered a status quo on the petition until further hearing. In 2017, a similar PIL had been filed against Indiabulls for alleged irregularities in the sanction of loans by its subsidiary, Indiabulls Housing Finance. The PIL had sought a court-monitored investigation into the matter, which was later dismissed by the Delhi High Court.
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