NIE: Deadline past, NCLT drags feet on Bhushan Power and Steel bid decision

6 April 2019: As the old saying goes, justice delayed is justice denied. A resolution plan for insolvent firms is generally to be found with 270 days, in line with the requirements of Insolvency and Bankruptcy Code.

However, now more than 600 days on, there seems to be no end in sight for the debt-laden Bhushan Power and Steel (BPSL) even as the National Company Law Appellate Tribunal had directed the Delhi bench of National Company Law Tribunal to decide on JSW Steel’s bid by March 31.

JSW Steel came from behind and bettered its initial bid to trump Tata Steel’s Rs 17,000 crore offer. The Sajjan Jindal-led company offered to pay Rs 19,650 crore, which included upfront payment of Rs 19,300 crore and an equity infusion of Rs 350 crore for operational creditors. 

In early February, JSW Steel received a Letter of Intent from the resolution professional, recommending the sale of BPSL to the steel major. The transaction is awaiting the approval of the NCLT, while sources say “there are some six to seven hearings pending, post which the tribunal may close the deal by April-end in favour of JSW Steel.” 

In a separate development, JSW Steel informed the BSE on Friday that the steelmaker intends to enter the dollar bond market with a benchmark issue to raise up to $500 million in debt.

The New Indian Express reported

ET: After Daiichi plea, SC stays religare finvest-initiated insolvency at 23 companies

6 April 2019: The Supreme Court has ordered a stay in response to a plea by Daiichi Sankyo on the insolvency proceedings against 23 companies allegedly linked to the Singh brothers, Malvinder and Shivinder, on petitions filed by Religare Finvest (RFL) .

Daiichi had approached the apex court saying a March 14 order by Securities and Exchange Board of India (Sebi) had found many of these companies to have ultimately routed money borrowed from Religare Finvest to the Singhs.

Religare Finvest filed insolvency petitions in July last year on grounds that these companies had defaulted on loans of Rs 1,900 crore taken from the NBFC. “It was observed that funds amounting to Rs 2,315.09 crore had been diverted from the books of RFL for the utilisation of promoters and promoter group entities of Religare Enterprises,” the order quoting an independent forensic audit stated.

“The ultimate beneficiaries of such fund diversion, prima facie, are Shivinder Mohan Singh and Malvinder Mohan Singh as the entities were jointly being controlled by (them) through Shivi Holdings Pvt Ltd and Malav Holdings Pvt Ltd, respectively,” the order stated.

“The stay has been granted in response to Daiichi plea that NCLT proceedings initiated by Religare Finvest against some of judgement debtors and garnishee companies would impede recovery of Daiichi’s dues and impose moratorium on execution proceeding,” said Amit Mishra, partner at P&A Law offices, which is representing the Japanese drug maker.

Religare did not respond to an emailed request for comments.

The companies were granted loans on the basis that they were parties ‘known to the promoters,’ according to internal company correspondence and an audit conducted by external auditor TR Chadha on behalf of private equity investor Siguler Guff, ET had reported in July last year.

The list of companies includes Modland Wears, Fern Healthcare, Volga Management, Zolton Properties and Torus Buildcon. Some of these companies are also accused of facilitating the alleged diversion of funds from Fortis Healthcare by the Singh brothers.

Daiichi has also independently filed an application at the NCLT to be party to the insolvency proceedings against these companies, though sources close to Religare argued that none of the companies were party to transactions involving the sale of Ranbaxy to Daiichi Sankyo and were not recipients of proceeds received by the Singh brothers from that sale.

Daiichi’s has won an arbitration award in Singapore after it sought compensation from the Singhs on grounds that they concealed information from the drug maker at the time of Ranbaxy’s sale to the Japanese company about a decade ago.

The Economic Times reported

DNA: Supreme Court to decide Daiichi Sankyo’s contempt plea against ex-Ranbaxy promoters on Thursday

6 April 2019: The Supreme Court will decide on April 11 whether to send industrialist brothers Malvinder Mohan Singh and Shivinder Mohan Singh to jail for contempt as the duo failed to give any concrete plan to honour an arbitration order requiring them to pay over Rs 3,500 crore to Japanese firm Daiichi Sankyo.

Present before a bench headed by Chief Justice Ranjan Gogoi, the brothers got enough signs of the court’s ire as the bench listed the contempt petitions against them for Thursday next week and stayed all insolvency proceedings the company is facing before the National Company Law Tribunal (NCLT). The duo was directed to remain present for the next hearing.

The bench, which also had Justices Deepak Gupta and Sanjiv Khanna, told their counsels that the former Ranbaxy promoters, once the flag-bearers of the pharmaceutical industry, had failed to honour the court’s orders to present a concrete proposal for paying what is due to the Japanese firm.

Daiichi approached the apex court seeking contempt action against the duo as they had failed to comply with a Singapore arbitral award. The Japanese drug maker, which purchased Ranbaxy in 2008, had alleged that its former promoters concealed information about a pending probe against them by the US Food and Drug Administration and the US Department of Justice.

In an earlier hearing, Malvinder’s counsel informed the court that he had renounced the world and assigned his properties to a spiritual guru who owes him Rs 6,000 crore. The bench was not happy as it claimed, “You may own half of the world but if there is no compliance of our order to submit a concrete plan to realize the arbitral amount, we will send you to jail in contempt.”

The other brother Shivinder, seeking permission to speak, submitted that things are not good with the company whose net worth is “only about Rs 900 crore”. However, given some years, he undertook to increase the value of company stock to Rs 2,000 crore. The bench said it would consider all arguments when it would take up the contempt plea on Thursday.

Bitter Pill

  • Malvinder & Shivinder Singh have failed to give a plan to pay Rs 3,500 crore to Daiichi Sankyo 
  • Daiichi says the brothers hid information about a probe against them by US bodies
  • Malvinder’s counsel had earlier told the court that his client had renounced the world 

The DNA reported

TOI: Lessors want to deregister Jet planes; IOC briefly cuts fuel

6 April 2019: A solution to its financing crisis continues to evade Jet Airways, with its lenders yet to infuse any significant capital.

On Friday, Indian Oil cut fuel supplies for a few hours over unpaid bills. Some lessors have also sought deregistering of grounded planes in order to fly them out of the country. IOC did not give details of the airline’s dues. India’s biggest oil marketing company cut off supply round noon, and resumed only around 6pm after it was assured of payment.

“Jet fuel supply has been restored,” an airline spokesman said. Jet is operating with only 26 aircraft, against its original fleet strength of 119 planes.

Lenders did not indicate why the proposed cash infusion of Rs 1,500 crore has not yet taken place. Last month, SBI and PNB had agreed to infuse Rs 1,500 crore subject to promoter Naresh Goyal stepping down and reducing his stake, banks getting a 51% stake in exchange for Re 1, and SBI and PNB getting specific security for the emergency funding.

Etihad Airlines, Jet’s partner and a potential buyer, held talks with SBI on Friday, but no deal was announced. According to a bank official, Etihad had earlier placed several conditionalities for acquiring Jet, most of which were beyond the powers of lenders. It is not clear where the restructuring plan has got stuck, but banks have invited bids for expressions of interest from potential buyers up to April 9. There are some indications that lenders are not as confident of a sale as they sounded last month.

On Thursday, SBI said that while all efforts will be made for the stake sale, other options may be considered if sale efforts don’t produce the desired result.

Last month, SBI chairman Ranish Kumar had come out strongly against insolvency proceedings for an airline, saying it would result in grounding its operations. However, now some lenders are not ruling out any eventuality.

Meanwhile, some lessors are learned to have applied to the Directorate General of Civil Aviation (DGCA) to de-register planes that have already been grounded, while others are expected to follow. This would enable them to fly the planes out of the country and deploy them elsewhere. Till now, aircraft were grounded as there was a feeling Jet may get funding. But lessors are increasingly getting restless and want their planes to be rented out to others.

The Times of India reported