At a time when Usha Martin’s 50% partner, Prashant Jhawar is raising questions about the company’s financial management, Shapoorji Pallonji Group has filed an insolvency petition against Usha Martin alleging non-payment of dues against its construction work in the Jamshedpur plant in 2011-12, sources in Usha Martin said.
The Mumbai bench of the National Company Law Tribunal has heard the case on Wednesday in which Shapoorji Pallonji has claimed from Usha Martin Rs 45 crore, including interest on the principle amount of Rs 27.5 crore.
Shapoorji Pallonji has moved the NCLT as an unsecured operational creditor, which might cause delay to the Tatas in acquiring Usha Martin’s steel business. While the Tatas were targeting to complete the process of acquisition within the end of the calendar year, the NCLT has fixed January 7 as the next date of hearing.
Tata Steel through its 54.5% subsidiary Tata Sponge Iron acquired Usha Martin’s steel busines for Rs 4,700 crore as a going concern. Although Usha Martin’s managing director Rajeev Jhawar was not available for comments on Friday, he has been saying that the proceeds of the sale will go in paying the debts, former managing director Prashant Jhawar has been alleging mis-appropriation of funds, while he backed the slump sale.
Sources close to Prashant Jhawar said that Usha Martin as on September 30, has a consolidated borrowing of above Rs 3,500 crore and its liabilities exceed its asset value, which has been assessed at Rs 1,660 crore.
While the slump sale can clear off its dues, the deal may get stuck if the NCLT admits Shapoorji Pallonji’s plea.