The State Bank of India has dragged Jayaswal Neco Industries to the National Company Law Tribunal (NCLT), which has a loan default of over Rs 3,000 crore. The company was among the 28 companies identified by the Reserve Bank of India in its second list of big corporate defaulters.
Jayaswal Neco Industries and other companies were given December 13 deadline to restructure their debt, failing which the central bank has asked lenders to initiate the insolvency process against them. It was earlier reported that lender tried to negotiate for successful resolution and even asked for an extension of the deadline for big defaulters: Videocon and Jaiprakash Associates.
Jayaswal Neco Industries, in BSE filing, said that it received a copy of the application filed by the SBI against the company under Section 7 of the Insolvency and Bankruptcy Code, 2016.
Banks were asked by the RBI to not move against Jaiprakash Associates to NCLT as there were several cases against the company in the Supreme Court and the decision was pending. In August, RBI had asked banks to either resolve the 28 more large stressed accounts or refer them to the NCLT by 31 December. These accounts together account for 40% of bad loans of around Rs 4 trillion.
Some of other large accounts, which are likely to go to the NCLT, include Asian Color Coated Ispat, Castex Technologies, Coastal Projects, East Coast Energy, IVRCL, Orchid Pharma, SEL Manufacturing, Uttam Galva Metallic, Uttam Galva Steel, Visa Steel, Essar Projects, Jai Balaji Industries, Monnet Power, Nagarjuna Oil Refinery, Ruchi Soya Industries and Wind World India.
Earlier, 11 of the 12 accounts identified by the RBI for immediate insolvency was approved by the NCLT. These accounts made up for 25% of the total bad loans. In November, the government amended the Insolvency and Bankruptcy Code to bar wilful defaulters and defaulting promoters from bidding during the insolvency process.