The investigation team has already sent letters to parties and banks dealing with GNCL to gather information regarding GNCL’s associates, arms and trusts wherein the firm’s directors act as trustees.
The Serious Fraud Investigation Office (SFIO) has began an investigation into the financial affairs of Kolkata-based Gujarat NRE Coke (GNCL), a metallurgical coke maker which is undergoing the insolvency process.
The investigation team has already sent letters to parties and banks dealing with GNCL to gather information and documents with regards to GNCL’s associates, subsidiaries (both in India and overseas), and trusts wherein the directors of the company act as trustees.
The investigation has been initiated under Section 212(1)(a) of the Companies Act, 2013, sources said.
As per the section, SFIO can initiate investigation “on receipt of report of the registrar or inspector under section 208”. Such an exercise is ordered by the government in case the registrar or inspector recommends so after inspecting books of accounts and provides adequate reasons or loopholes for further investigation.
GNCL owes lenders more than Rs 5,000 crore. The company’s financial creditors include State Bank of India, Bank of Baroda, Axis Bank, Standard Chartered Bank, Tamilnad Mercantile Bank, United Bank of India, Syndicate Bank and Life Insurance Corporation of India, among others.
In April 2017, the Kolkata bench of the National Company Law Tribunal (NCLT) admitted an application by the company under Section 10 of the Insolvency and Bankruptcy Code (IBC).
The moratorium of nine months for completion of the resolution process for the company promoted by Arun Kumar Jagatramka expired on January 1, 2018, but the company’s creditors did not approve any resolution plan during the stipulated time of 270 days. Given the firm’s loans remained non-performing for more than a year, the promoters of the company became ineligible under the revised IBC guidelines — which does not allow promoters to submit a resolution plan.
To avoid complications and safeguard interest of shareholders, trading in the equity shares of GNCL has been suspended since February 12, 2018 by both the National Stock Exchange and BSE.
GNCL has an installed capacity to produce 1.2 million tonnes of metallurgical coke annually.