Lack of clarity from investigative agencies on the controversy surrounding coal block allocations has led banks to defer the recast of R1,650-crore in debt of Corporate Ispat ? a unit of Abhijeet Group which was under investigation.
Corporate Ispat was referred to the corporate debt restructure (CDR) cell in June.
Manoj Jayaswal-led Abhijeet Group was alleged to be among the biggest beneficiaries of the controversial coal block allotments as part of which the company got blocks in Jharkhand and Chhattisgarh. Central Bureau of Investigation (CBI), which had started its investigations into Abhijeet Group for allegedly misrepresenting facts in its coal block application, is yet to make its findings public.
?Banks had taken a step back due to the group’s name in the scam because of which the account turned bad. Later, we got to know that there was no case, but this has not been clearly communicated so we are waiting for the CBI to clear this,” said Shubhalakshmi Panse, Allahabad Bank CMD.
In the August meeting at the CDR cell, a majority of banks did not submit the requisite mandate to admit the company into CDR cell, due to which the case was deferred. Bankers say till the time there is some clarity, they would be wary of restructuring the debt.
The consortium of 21 banks which has exposure to Corporate Ispat is led by State Bank of India. Other banks in the consortium are Bank of India, Union Bank of India, UCO Bank and Central Bank of India.?
Bankers meet every month to take stock of the development in each company admitted to the CDR cell and whether they should be approved or not. In the July-August period, cases worth R20,669 crore were referred to the CDR cell for debt recast.