NCLT rejects GVFL plea against realtor Hubtown

The National Company Law Tribunal (NCLT), in a relief to BSE-listed real estate developer Hubtown, has rejected venture finance firm GVFL Trustee Company's claim of around INR 150 crore against the company. GVFL had filed four petitions, claiming that it, as a secured shareholder, was entitled under the shareholder pact to call upon the developer, as the original promoter, to buy back shares at a minimum 26% IRR per annum. GVFL had also claimed that its investment in Hubtown Bus Terminal (Mehsana), a special purpose vehicle of Hubtown, to be a debt exposure, including principal and the IRR until August 2018. It claimed that the developer was in default as its put option was not entertained when a demand notice was sent on January 2, 2018, seeking an exit of the investment. The ruling is expected to impact several such investment structures entered into by developers and financiers.