NCLT admits JM Fin’s petition against Sandhya Prakash

By: | Published: September 20, 2017 5:20 AM

The central bank had on June 13 asked banks to refer a dozen troubled companies — with a combined debt of close to Rs 2.4 lakh crore — to the NCLT.

The Ahmedabad bench of the National Company Law Tribunal (NCLT) has admitted an insolvency petition against Sandhya Prakash — publisher of Dainik Sandhya Prakash — a Hindi evening newspaper in Bhopal.

The Ahmedabad bench of the National Company Law Tribunal (NCLT) has admitted an insolvency petition against Sandhya Prakash — publisher of Dainik Sandhya Prakash — a Hindi evening newspaper in Bhopal. The petition was filed by JM Financial Asset Reconstruction Company (ARC). The company is engaged in printing, packaging, real estate and infrastructure and owes lenders Rs 133 crore. Lenders to the company such as Housing and Urban Development Corporation (Hudco) and Dena Bank later sold their loans to JM Financial ARC. Other lenders include Punjab National Bank (PNB) and Syndicate Bank. “The corporate debtor (Sandhya Prakash), vide its letter dated April 9, 2013, acknowledged that they have not been able to meet their loan obligations on time and requested the financial creditor for restructuring of the outstanding loans,” the judgment said. Sandhya Prakash had borrowed from lenders including Dena Bank and Hudco for construction of Aura Mall in Bhopal in 2008. When the company was unable to repay its loans, lenders sold their loans to JM Financial ARC in 2013.

According to the judgment, the company, through a letter dated April 9, 2013, requested lenders to restructure its loan. “The financial creditor agreed to grant additional facility of Rs 12 crore and restructured the existing loans,” it added. On April 10, 2017, the financial creditor initiated measures under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act to recover its dues. Meanwhile, the court has appointed Devendra Padamchand Jain as the interim resolution professional (IRP). “Although, ARCs should help promoters complete a project once they buy a loan from lenders, JM Financial is seeking Rs 132 crore for a Rs 46-crore loan disbursed in 2013. This rate of interest is outrageous,” a company official told FE.

Lenders have lined up several bad loans for resolution under the Insolvency and Bankruptcy Code (IBC). For instance, Union Bank of India plans to take 10 accounts of Rs 1,400 crore to the bankruptcy court. The central bank had on June 13 asked banks to refer a dozen troubled companies — with a combined debt of close to Rs 2.4 lakh crore — to the NCLT. The RBI has also sent a second list of accounts which banks have to refer to the NCLT if the stress is not resolved by December 13. The central bank, after receiving sweeping powers to resolve bad loans through an amendment to the Banking Regulation Act, issued the circular on the criterion that the total banking exposure of the company should be at least Rs 5,000 crore and 60% of this exposure should have turned non-performing as of March 2016. According to the norms, once the case is with the NCLT, the lenders need to set up a committee of creditors (CoC) that will come up with a plan on how the asset will be tackled. If the committee is unable to find a solution within 180 days, this can be extended to 270 days. After 270 days, the company will go into liquidation.

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