Acting on an application that accused smartphone brand OPPO of non-payment of dues, the Chandigarh bench of the National Company Law Tribunal (NCLT) recently issued a notice to the Chinese smartphone maker, hinting that it could face the company insolvency resolution proceedings (CIRP) under the Insolvency and Bankruptcy Code, 2016.
The petition was filed by Hipad Technology India Private Limited, a Chinese phone manufacturing company and also one of OPPO’s suppliers. It has accused OPPO of not paying its outstanding debt of Rs 17 crore.
As per the NCLT’s September 9 notice, if OPPO fails to give confidence to the tribunal that it is capable of paying back its debt to Hipad, the NCLT, in all probability, will appoint an insolvency resolution professional to replace the present promoters of the company.
Hipad, which manufactured mobile phones in India until 2019, itself faced insolvency proceedings in December 2020 when one of its financial creditors, the Industrial and Commercial Bank of China (ICBC), approached the NCLT over non-payment of loans.
A close source at Hipad informs Outlook that the NCLT has appointed a liquidator who is currently taking stock of the financial strength of the company. “While doing so, the liquidator realised that OPPO has to pay Rs 17 crore dues to the company against the services and supplies that it made,” he says, requesting anonymity.
In June 2022, Hipad decided to file an application under Section 9 of the IBC, which deals with the initiation of CIRP by the operational creditor, Hipad in this case, after OPPO failed to fulfil its financial obligations even with the liquidator raising a demand in April 2022.
Outlook contacted the office of Ajit Kumar, Hipad’s liquidator, but he was not available for a comment. Outlook also reached out to Rishabh Maheshwari, OPPO India's in-house legal counsel, but did not get a response till the time of the story's publication.
Established in 2004, Oppo claims to be the world’s leading smart device manufacturer and innovator with a footprint in over 50 countries and regions.
