NCLAT Gives Conditional Nod For Share Transfers Between GE, Baker Hughes
The National Company Law Appellate Tribunal on Tuesday allowed U.S.-based General Electric Co. to sell a controlling stake in its step down subsidiary Baker Hughes LLC, but said the sale will be subject to the final order on the petitions filed by GE’s Indian joint venture partner Triveni Turbine Ltd.
A three-member NCLAT bench, headed by Chairperson Justice SJ Mukhopadhaya, said that GE’s stake sale in Baker Hughes should not affect the business of Triveni Turbine and its Indian joint venture firm GE Triveni Ltd.
GE Triveni is a joint venture of GE Oil & Gas and Triveni Turbine formed in 2010.
The appellate tribunal said it allows Baker Hughes and GE to transfer the title of all the shares to any party without affecting the business of appellant Triveni Turbine and the JV firm GE Triveni. The NCLAT order further said that such sale “should not affect all the five agreements entered into among parties” as referred to in their undertaking before the National Company Law Tribunal.
The agreements are related to marketing and sales, technology licence, trade and trade name, service legal agreement and ancillary agreements to the joint venture, as per the undertaking given by the foreign companies before NCLT’s Benagluru bench.
The appellate tribunal told GE that its stake sale in Baker Hughes LLC would be subject to the final outcome of its order in the matter. “All transactions of shares if made shall be subject to the decision of these appeals,” said the NCLAT. It also said the obligations of GE and Baker Hughes for the Indian JV would continue till the next hearing.
The NCLAT has listed further hearing in the matter on Sept. 25 and issued notices to GE, Baker Hughes and other respondents to file their reply within 10 days.
The NCLAT order came on two petitions filed by Triveni Turbine that challenged the Aug. 23, 2019, interim order passed by NCLT, vacating its earlier order of June 12 and deleting GE from the name of parties.
Triveni has alleged that the U.S.-based firm had perpetrated “fraudulent, prejudicial, harsh, oppressive, burdensome and wrongful acts”, which has hurt the its business interest of GE Triveni.
Triveni Turbine is opposing GE stake sale in Baker Hughes as it believes that it would have impact on GE Triveni because, in the event of such a deal, it would neither have access to technology nor assistance for marketing.
The JV would also lose the GE brand which was promised to them, Triveni Turbine said.
GE Triveni offers a portfolio of steam turbine products of 30 MW to 100 MW capacity in the industrial power generation market globally.