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Binani seeks stopping insolvency move against subsidiary
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SME Times News Bureau | 23 Mar, 2018
Amidst charges of "fraudulent transactions", Binani Industries Ltd on
Thursday submitted an application before the Kolkata bench of National
Company Law Tribunal (NCLT) seeking termination of the corporate
insolvency proceedings against its subsidiary, company's counsel said.
The company, in its application, also claimed that it can "pay off all its creditors".
The
move came after it concluded a commercial understanding with Aditya
Birla Group firm UltraTech Cement to sell its entire 98.43 per cent
stake in its cement manufacturing subsidiary at a consideration of Rs
7,266 crore.
However, Resolution Professional (RP), Vijaykumar V
Iyer, has submitted the resolution plan of Dalmia Bharat-controlled
Rajputana Properties before the NCLT as the "highest bidder" to take
over the debt-laden company.
"We have filed an application before
the Tribunal seeking termination of insolvency proceedings commenced
against the Binani Cement and we also said Binani Industries can pay off
all the creditors. This application is likely to be heard on next
Tuesday," said advocate Ratnanko Banerjee representing Directors of
Binani Industries.
He also said the directors of the company also
challenged the process of conducting the insolvency proceedings and
"expensive charges" made by the Resolution Professional.
Citing a
forensic audit report, before the court, RP's counsel Abhrajit Mitra on
Thursday said a loan of about Rs 1,100 crore was given by the corporate
debtor, Binani Cement, to its holding company Binani Industries Ltd.
"The
loan was given to Binani Industries to buy back shares of its
subsidiary. As per the balance sheet, Rs 1,100 crore was payable to the
company (Binani Cement) by its holding company. What the fraudulent
transaction is was that the interest chargeable was fully waived," he
asked.
According to Mitra, the RP has filed an application based
on the forensic audit report of the "fraudulent transaction of the
previous management".
He, however, said the matter of fraudulent
transaction was a separate one and it was incumbent on the RP to bring
this to the notice of NCLT bench.
"The discovery of fraudulent
transaction and its outcome should not impact the resolution process and
the finalisation of the resolution plan," Mitra claimed.
Meanwhile, Binani's industries, denying such allegations, said any application filed by the RP was an "afterthought".
"We
have not been served a copy of the application...No sooner the
application i.e. served upon us we shall deal with the same," Binani
Industries said in a regulatory filing.
One of its senior counsel
on Thursday said: "The RP made certain allegations of dubious
transactions but there is no documentary support of that. As an
afterthought, he has made these allegations. One of Directors of Binani
filed an application alleging that the fraudulent transactions were made
by the RP."
The RP has been directed by Justice Jinan K.R. to reply to applications and allegations raised by the company.
"There
are some allegations against the RP. He has to deal with that and make a
reply. He was also directed to submit a progress report," Binani
Industries' counsel said.
Despite the allegation of "dubious
transactions" made promoters of Binani Industries, the counsel of the
Committee of Creditors to the insolvent Binani Cement on Thursday urged
the Tribunal that it could consider resolution plan of Dalmia Bharat, as
considered by highest bidder, if the court finds it "proper".
"The
alleged fraud is nothing to do with the sale of assets. If the offer is
proper, the tribunal can consider it," the counsel for the Committee of
Creditors of the debt-laden company, Pratap Chatterjee said in his
submission before the bench.
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