Steps taken by the resolution professional (RP) for Alok Industries to recover trade outstandings to the tune of Rs 11,622 crore from 5,293 debtors of the textile company remained unsuccessful as 2,467 of them could not be traced, documents perused by FE show. \u201cDebtors were not locatable at the addresses that were provided by Alok,\u201d the documents, understood to have been made available to the committee of creditors (CoC) ahead of a meeting scheduled for April 13 under the Insolvency and Bankruptcy Code (IBC) process, noted. The RP for Alok Industries is Ajay Joshi. Outlining the steps taken by the RP to recover the trade outstandings, the papers state: \u201cAppointed an advocate to send legal notices to the debtors. Out of 5,293 legal notices sent during December, 2017, 2,822 letters returned undelivered and status of 2,467 legal notices remain unclear.\u201d A debt collection agency had been appointed to locate debtors and recover outstanding, the documents said. According to the papers, the total \u201ctrading debt on account of sale of fabric (Trading Transactions) to various traders of Alok (numbering approximately 5,293) (\u2018Trading Debtors\u2019) as at June 2017 amounted to about Rs 11,622 Crores\u201d. The papers say Damania & Varaiya, a CA firm, was appointed (pursuant to fourth CoC meeting) to conduct an independent verification of the transactions (trading transactions). \u201cDNV was unable to conclude its observations on the trading business segment of Alok with the perspective of reporting under Section 66 of IBC, 2016,\u201d the documents say. They also noted that a forensic audit conducted by Grant Thornton \u2014 for the period April 1, 2012, to March 31, 2015 \u2014 found \u201cno malfeasance on the part of promoters of the Alok or any transfer involving siphoning of funds was observed\u201d. The RP cited some reports that were analysed to understand the reason for the high quantum of outstandings. While the stock audit reports of 2016 stated that \u201cgenuineness of sales made to Debtors with outstanding amounts above Rs 50 lakh have been verified, the statutory auditor reports of FYs 2015-17 made no comment\/qualification with respect to these trading transactions. \u201cConsidering the divergent observations in these reports as well as found from the exercise carried out by the RP through these independent agencies, the RP is unable to conclusively determine if the Trading Transactions trigger requirements under Section 66,\u201d the letter noted. Section 66 (1) of the IBC says that if during the corporate insolvency resolution process or a liquidation process it is found that any business of the corporate debtor has been carried on with intent to defraud creditors of the corporate debtor or for any fraudulent purpose, the adjudicating authority may on the application of the resolution professional pass an order that any persons who were knowingly parties to the carrying on of the business in such manner shall be liable to make such contributions to the assets of the corporate debtor as it may deem fit. As is known, Alok Industries attracted just one bid from the Reliance Industries (RIL)-JM Financial ARC combine in the ongoing insolvency process under the IBC. The matter is being heard before the Ahmedabad bench of the National Company Law Tribunal. While 70% of the lenders voted in favour of the resolution, it was lower than the 75% required under the IBC for the proposal to go through. Emails sent to Joshi, Dilip B Jiwrajka (managing director of Alok Industries before insolvency proceedings were initiated) and KH Gopal (company secretary before insolvency proceedings began) did not elicit any response till the time of going to press. The documents made available to the CoC observe that after the corporate insolvency resolution process commenced, \u201cconsidering that hardly any money had been received for more than 24 months, instructions were given for the Trade Outstanding be provisioned for in every quarter of the financial year ending March 31, 2018\u201d. Accordingly, as at December 31, 2017, a total of Rs 11,037 crore were provisioned and during the period April 17 to Dec 17 about Rs 585 crore were written off.\u201d Lenders indicated to FE that if the resolution plan submitted by RIL-JM Financial ARC had been approved, they would have received approximately Rs 4,700 crore. They also said that the liquidation value for the business had been placed at close Rs 4,433 crore, while the fair value had been estimated at around Rs 5,400 crore. Among the lenders to the company are State Bank of India, which has the biggest exposure, Axis Bank, Corporation Bank, UCO Bank, Bank of Maharashtra, Life Insurance Corporation of India, Allahabad Bank, Union Bank, Dena Bank, Oriental Bank of Commerce and United Bank. Alok Industries owes lenders Rs 29,614 crore and reported a net loss of Rs 3,502 crore on Rs 8,326 crore in revenues in FY17. In the December quarter of FY18, its net loss stood at Rs 4,745 crore on revenues of Rs 952 crore in the same period.