Even as the insolvency process is gaining momentum, an act of alleged collusion has come to light, that underlines how interested parties might get together to scuttle the process.
Even as the insolvency process is gaining momentum, an act of alleged collusion has come to light, that underlines how interested parties might get together to scuttle the process. The Ahmedabad Bench of the National Company Law Tribunal (NCLT) has observed that there are “serious allegations of collusion” between the financial creditors and the borrower to defeat the claim of an operational creditor in the insolvency case of Asian Natural Resources India. According to an earlier NCLT order on May 23, the company owes lenders `38.3 crore as principal borrower and `82 crore as corporate guarantor to Bhatia Global Trading.
The operational creditor in question is Vitol S A, whose claim from the borrower is more than the claims of all the financial creditors put together. “It is pertinent to mention here that one of the operational creditors, ie Vitol,… has not been given any notice of any of the meetings of the committee of creditors,” the order said.
The tribunal’s order was in response to a petition filed by Asian Natural Resources’ resolution professional Anshuman Chaturvedi seeking extension of the 180-day resolution deadline. The court rejected the petition since it was filed on November 30, after the expiry of 180-day deadline, which ended on November 19. “Therefore it is a case where the resolution process could not be completed only because of the division among the financial creditors in the matter of appointment of Resolution Professional till October 4,” the order added.
The order said that while the tribunal had directed the CoC to give notice to operational creditors, including Vitol, and consider their objections, if any. “In spite of such direction by this adjudicating authority, the interim resolution professional (IRP) or the CoC did not choose to give any notice to Vitol S A, the operational creditor, even for the meeting of CoC held on 23.11.2017,” the order said.
Lenders to the company include IDBI Bank, Bank of India (BoI), State Bank of India (SBI), Oriental Bank of Commerce (OBC), UCO Bank, Union Bank of India.
Once companies are admitted under the IBC, lenders have to set up a committee to come up with a resolution plan. If that cannot be done in a period of 180 days, which can be extended to 270 days, the borrowing entity will go into liquidation.