NCLT Rejects Talwandi Sabo Power’s Demerger Plan Over Hidden Debt

The National Company Law Tribunal (NCLT) has rejected Talwandi Sabo Power Limited’s (TSPL) demerger plan, which was part of Vedanta Limited’s restructuring.

The decision came after SEPCO, a creditor, objected, stating that TSPL failed to disclose a ₹1,251 crore debt in its proposal. NCLT found that TSPL’s financial statements had acknowledged this liability since 2019, but it was left out of the creditor list, impacting transparency.

A bench ruled that this non-disclosure violated Section 230(2)(a) of the Companies Act, 2013, and could mislead creditors and shareholders, leading to the plan’s rejection.