Dalmia seeks RBI intervention in Binani Cement settlement case

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Kolkata | Published: April 11, 2018 4:46:40 AM

Dalmia Bharat on Tuesday wrote to the Reserve Bank of India, urging that it “directs the banks not to deviate from the insolvency and bankruptcy process” as they are “committed to contract” with it.

binani cement, rbi, dalmia bharatDalmia Bharat wrote to the RBI governor, urging that he ‘directs the banks not to deviate from the (Binani Cement) insolvency and bankruptcy process’

Dalmia Bharat on Tuesday wrote to the Reserve Bank of India, urging that it “directs the banks not to deviate from the insolvency and bankruptcy process” as they are “committed to contract” with it.

Dalmia Bharat also sent letters to the chiefs of all the lenders, which are the members of the committee of creditors (CoC) for the insolvent cement maker, warning them that considering the out-of-tribunal settlement would “violate several regulations”.
In a letter to the RBI governor, Rajputana Properties (RPL), the wholly-owned subsidiary of Dalmia Cement (Bharat), said, “We write to bring your notice certain events pertaining to the Corporate Insolvency Resolution Process (CIRP) of Binani Cement (BCL).”

According to RPL, the out-of-tribunal settlement proposal is being given at the end of the corporate insolvency resolution process (CIRP) when its plan is “pending approval of NCLT”.

“This proposal is nothing but a fraud on statue…,” it alleged. Notably, demanding an end to the resolution process against BCL, initiated by the Bank of Baroda last year, BIL said it has entered into a business arrangement with UltraTech Cement to mobilise sufficient funds to pay of all the claims and restore the cement maker back to its full financial health. Binani Cement’s dues stand at over Rs 7,000 crore.

BIL approached the apex court on Monday after an indication from lenders that they would consider its proposal only after necessary permissions are obtained for proceeding with any settlement. The matter was mentioned before a bench led by Chief Justice Dipak Misra who said that it will be taken up for hearing on April 13.

“Apart from the fact that the BIL is barred as a promoter under Section 29A of the Code to participate in the CIRP, BIL and other affiliates of Braj Binani have been suspected of undertaking various transactions which are undervalued, fraudulent and extortionate, totaling to approximately Rs 2,400 crore, as suggested by a detailed forensic report prepared by Haribhakti & Co, hired by the resolution professional under CoC’s instructions,” said the letter to the RBI governor.

“Banking conventions in India do not favour any dealings with an indicted promoter. In light of several frauds in the banking sector, any settlement with BIL will be scandalous, illegal, contrary to law, and make the bank a co-conspirator to yet another bank fraud….,” it averred.

“As the regulator for banking sector, we request you to examine the matter appropriately and if deemed fit direct the banks to not deviate from the IBC process and represent in all proceedings as they are committed to the CIRP and contract with RPPL in interest of justice and larger public purpose,” the Rajputana Properties letter said.

The creditors to Binani Cement include State Bank of India, IDBI Bank, Canara Bank, Bank of Baroda, Bank of India, Edelweiss Asset Reconstruction Company and others. On March 16, Dalmia Bharat had said the the resolution plan submitted by Dalmia Bharat-controlled Rajputana Properties was approved by the CoC. “The CoC of Binani Cement has recommended the resolution plan to the NCLT for its requisite approval,” Dalmia Bharat said in a statement, adding that the resolution plan had received almost 100% approval of the CoC members. Dalmia Bharat maintained that the resolution must happen as per the process laid out in the IBC.

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