NCLT Approves Piramal Fund's Move to Set Off Losses With Rs 200-Crore Securities Premium

The National Company Law Tribunal at Mumbai on Monday approved Piramal Fund Management Pvt. Ltd.'s plan to utilise Rs 200 crore (Rupees Two Hundred Crore Only) from its Securities Premium Account to wipe out accumulated losses, clearing the company's capital-reduction proposal under the Companies Act.

A coram of Judicial Member KR Saji Kumar and Technical Member Anil Raj Chellan recorded that “neither any objector has come before this Tribunal to oppose the Scheme nor has any party controverted any averments made in the Petitions,” and noted the Regional Director's statement that he had “no objection to the proposed scheme of reduction” after the company addressed his observations.

Piramal Fund Management, incorporated in 2005 and engaged in investment advisory for the real-estate sector, sought approval to adjust its negative profit-and-loss balance as on April 1, 2025 by using funds standing in its Securities Premium Account.

The company told the tribunal that its accumulated losses had wiped-off the value represented by the share capital and securities premium account, and that the proposed adjustment would result in a fairer reflection of the 'Other Equity' in the balance sheet.

It added that the reduction shall not lead to payout to any of its shareholders leading to no change in the overall net-worth of the Company.

During the hearing, the Regional Director submitted that all objections had been satisfactorily addressed. The company informed the tribunal that it had zero secured creditors and one unsecured creditor with an outstanding of Rs 1.35 lakh, and filed proof of service of notices.

It also relied on the statutory auditor's certificate confirming that the accounting treatment for the reduction is in conformity with the generally accepted accounting principles in India.

While allowing the petition, the tribunal clarified that the statutory authorities are at liberty to initiate any action under the law for non-compliance. It approved the minutes permitting the company to set-off the negative debit balance of Profit and Loss Account as on 1st April 2025 to the extent of Rs 2 crore against the Securities Premium Account appearing in the books of account of the Company and directed it to file the certified order with the Registrar within 30 days and publish the required notices.

Case Title: Piramal Fund Management Private Limited 

Case Number: C.P.104/MB-IV/2025

For ApplIcant: PCA Harsh C Ruparelia instructed by A R C H and Associates, Chartered Accountants

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