A step-down subsidiary cannot use indirect or colourable means to extract assets or establish parallel claims against its holding company undergoing liquidation, the National Company Law Tribunal, Chennai, held.
The tribunal made the observation while dismissing an application filed by St. John Lines PTE Limited against the liquidator of its holding company, St. John Freight Systems Limited.
A coram of Judicial Member Jyoti Kumar Tripathi and Technical Member Ravichandran Ramasamy observed:
“We are of the considerable view that a subsidiary, let alone a step-down subsidiary, cannot be permitted to use colorable means to extract assets or establish parallel claims against its holding company under liquidation. What cannot be done…