ICICI Bank on Thursday opposed an insolvency petition of Ramsarup Industries at the Kolkata bench of the National Company Law Tribunal (NCLT).
It was probably the first instance of a major bank opposing a defaulter’s appeal to initiate insolvency proceedings under the Insolvency and Bankruptcy Code (IBC).
The Kolkata-based steelmaker owes lenders Rs 2,049 crore, of which ICICI Bank’s exposure stood at Rs 70 crore.
In his submission, ICICI Bank counsel Siddhartha Datta said the bank opposed the company’s move. The Central Bureau of Investigation has been investigating the company. “The company is not a going concern; its plants are non-operational for a couple of years. And therefore, the company is not serious about resolution,” Datta said.
Referring to Section 65 of the IBC, Datta said initiation of the insolvency proceeding should not be fraudulent or with a purpose other than resolution. “Sarfaesi Act has already been invoked by ICICI Bank and steps are ongoing. But, the bank has been facing some opposition from the company for taking possession of assets,” he said, adding that the bank has applied to the district magistrate seeking police assistance.
The NCLT will hear the case on July 25 to decide whether the company’s application should be admitted.
Last month, the CBI had filed a case against the promoters and directors of Ramsarup Industries on the allegations of cheating United Bank of India of `184.43 crore. The agency had also conducted searches in 10 premises across five states as a part of the probe. A case was registered against nine accused, including promoters and directors of the company, on the allegations that the accused cheated United Bank by diverting a total sum of around Rs 130.95 crore to a group company, also based in Kolkata.
Lenders to the company include State Bank of India, ICICI Bank, Punjab National Bank, IDBI Bank, Axis Bank, Bank of India, Canara Bank, Allahabad Bank and United Bank of India, among others.
In FY17, the company had reported a net loss of Rs 55.66 crore on the back of Rs 2.75 crore in revenues.
The scrip on the BSE closed at Rs 2.09 on Thursday, down 4.5% from the previous close.