Resolution professional moves NCLT over Smaaash's Ownership change

Mumbai: Resolution professional (RP) Bhrugesh Amin has approached the Mumbai bench of the National Company Law Tribunal (NCLT) to disallow the change of ownership of the Smaaash Entertainment brand after it was discovered that promoter Shripal Morakhia had transferred it to a privately owned company.

In a petition filed before the court, the RP said that Morakhia had sought to "sell, assign and transfer" the brand content and trademarks of the company to privately owned Fun Gateway Arena just 18 days before the company was admitted into the insolvency process.

"It is equally shocking...that the brand content has been assigned to respondent no 1 (Fun Gateway) for a paltry sum of ₹1.5 crore based on questionable valuation undertaken by the erstwhile management of the corporate debtor. In fact, even this paltry consideration has not been paid but set off against an antecedent liability owed by the corporate debtor...." the petition said.


The petition added that Smaaash and Fun Gateway are related parties having common directors many times and also have a common registered office and official email ids. It mentions Rupesh Mohite as the director of Smaaash until May 2014 and also the director of Fun Gateway and AHA Holdings. Mohite signed the agreement allowing the transfer of the brand from Smaaash.

A person familiar with the case said that the brand transfer was completed in August 2022 after which Fun Gateway also inducted Abhishek Javeri, the son-in-law of Morakhia as director in November 2022. All this after the insolvency process was started in May 2022.

The petition said that the assignment of the agreement in April 2022 smacks of mala fide intentions of the erstwhile management and suspended directors. "In fact on the date of the 2022 assignment agreement, the company petition under Section 7 of the IBC had already been finally heard and was reserved for order by this honourable tribunal," the petition said.

However, in a telephonic conversation with ET after this newspaper reached out to him through email, Morakhia said the deal for the brand was done in 2019 and hence the question of mala fide intention does not arise.