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NCLT pulls up lenders of Sterling SEZ

Date: 26-04-2019
Subject: NCLT pulls up lenders of Sterling SEZ
Mumbai: The bankruptcy court asked the lenders of Sterling SEZ & Infrastructure to explain why it should not order an inquiry into their conduct in accepting the settlement offer from the company’s promoters when they were absconders. 

The Mumbai bench of the National Company Law Tribunal (NCLT) on Thursday gave 24 hours to the committee of creditors (CoC) to file its response. “Why the CoC should not be held responsible for not informing competent authorities before accepting the settlement offer from the promoters who are absconders,” asked the bench comprising Bhaskara Pantula Mohan and V Nallasenapathy. 

“We are directing all the members of the CoC who have approved the settlement offer to come to the tribunal, failing which, we will direct an inquiry into the conduct of the lenders.” On April 12, the tribunal stayed its earlier order to allow the withdrawal of the corporate insolvency process of Sterling SEZ, a firm which is owned by brothers Nitin and Chetan Sandesara, who are believed to be abroad and wanted by Indian agencies that are probing allegations of fraud against them. 

As much as about 92% of the creditors had agreed to accept Sandesaras’ offer to pay about half the dues to settle the dispute. 

The NCLT stayed the order after the Ministry of Corporate Affairs informed it that a similar application was pending before another bench of the NCLT, for withdrawing proceedings on the Sterling Group's flagship company Sterling Biotech, and that the government was keen to intervene in the matter. 

The Gujarat-based Sterling Group’s three companies — Sterling Biotech, Sterling SEZ and its trading arm Sterling International — are facing insolvency cases. The group owes about Rs 15,000 crore to its financial and operational creditors. Sterling SEZ owes more than Rs 4,500 crore. 

In the case of Sterling Biotech, the promoters have offered to pay as much as Rs 3,100 crore to settle outstanding dues of around Rs 8,100 crore and more than 90% of the lenders have agreed to withdraw the case. 

However, since the promoters are absconding, and various investigation agencies are probing allegations of fraud against them raised by lenders, the tribunal directed regulators, including the Reserve Bank of India and Securities and Exchange Board of India, and investigation agencies such as the Enforcement Directorate, CBI, incometax department and also the ministry of corporate affairs to file their response before allowing lenders to settle and withdraw the case. 

Source: economictimes.indiatimes.com

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