Aditya Birla Group-led UltraTech Cement on Wednesday sought the declaration of Binani Cement’s committee of creditors (CoC) meeting held on March 14 as “illegal and void”. It also asked for its offer “to be considered by the CoC and the applicant (UltraTech) be declared the highest successful bidder”.
In a supplementary affidavit filed before the Kolkata bench of the National Company Law Tribunal (NCLT), the company said that it was not given any notice to the CoC meeting held on March 14. “No notice was given to the applicant and they were not called for the meeting. It is submitted that despite repeated requests made by the applicant to consider its revised offer, the CoC and/or resolution professional have failed to consider and evaluate the revised offer made by the applicant,” its affidavit said.
It added that a statement was made by the counsel appearing for the resolution professional that revised offer made by the applicant was considered in the meeting of March 14.
“If the statement is accurate, it would only mean that Section 30(5) has been violated by not calling the applicant for the meeting,” it said, adding that if the statement is inaccurate, it means that “the RP blatantly ignored the revised offer despite it entailing a seriously higher offer, thereby ignoring the very objective and mandate of the IBC code — to maximise the value of assets under resolution”.
UltraTech said its offer is much higher than the financial offer made by the other competing bidder namely Rajputana Properties/Dalmia Cement and if the other resolution plan were to be accepted, it would only mean that revised offer has been rejected. “Under the proposal of the Applicant (UltraTech), 100% payment would be made to secured financial creditors, unsecured financial creditors, workmen and employees creditors etc,” the affidavit said.
Earlier this week, UltaTech Cement had announced an in-principle understanding with the parent company, Binani Industries, to arrange funds for it, amounting to Rs 7,266 crore, to pay off its “lenders debts and other liabilities” in exchange for the transfer of the company’s entire stake in Binani Cement (98.47% of total equity).
Following this agreement, Binani Industries was to seek withdrawal from the resolution process. “Binani Industries has requested the company (UltraTech) to issue a comfort letter, which shall be used as a support in its application seeking termination of the IBC (Insolvency and Bankruptcy Code) proceedings,” UltraTech Cement had said in a notification to the stock exchanges. According to legal sources, Binani Industries is believed to have filed an application for termination of insolvency proceedings before the NCLT on Wednesday. This could not be independently confirmed by FE.
On Monday, UltraTech Cement’s counsel Sudipto Sarkar had appeared before the Kolkata bench of the NCLT and appealed to Justice Jinan KR to consider its revised resolution plan for Binani Cement. The revised bid, which was submitted to the resolution professional (RP) Vijaykumar V Iyer on March 8, was not considered by the CoC in its March 14 meeting, the counsel had said. Justice Jinan KR has scheduled the next hearing of the case on March 22. UltraTech’s appeal is also likely to be heard at the time.
In a related development, Binani Industries refuted charges of fraud by the resolution professional, saying that as soon as any application is served upon them, “we shall deal with the same” even while alluding to the application by the RP being an afterthought. It added that the question of any fraud by the company does not arise as all its books are audited and all related party transactions disclosed.