Bankruptcy proceedings against Monnet Ispat, Alok Industries get NCLT nod
Monnet Ispat and Alok Industries are the second and third cases to get NCLT nod for bankruptcy proceedings, Jyoti Structures was the firstbusiness Updated: Jul 19, 2017 15:01 IST
Bankruptcy proceedings against Monnet Ispat and Energy Ltd and Alok Industries Ltd were approved by different benches of the National Company Law Tribunal (NCLT) on Tuesday.
They become the second and third among the big 12 firms identified for early bankruptcy proceedings by the Reserve Bank of India (RBI) where the process has gone into the second stage. Jyoti Structures was the first.
Separately, the Ahmedabad bench of the NCLT gave Essar Steel time till 22 July to file its objections to the insolvency proceedings initiated against it by its creditors, including State Bank of India (SBI) and Standard Chartered Bank.
The 12 firms were chosen by RBI for immediate bankruptcy proceedings based on one criterion: the total banking exposure of the company should be at least Rs5,000 crore and 60% of this exposure should have turned non-performing by March 2016.
In Alok Industries’ case, the firm had already admitted its default, but the tribunal had to hear a petition filed by the Industrial and Commerce Bank of China (ICBC) that sought dismissal or deferment of SBI’s petition against the firm. The Chinese bank has lent close to $55 million to Alok Industries and said there was an ongoing case before the Bombay high court seeking the liquidation of Alok.
The judge dismissed ICBC’s petition invoking Section 14 (1) (a) of the Insolvency and Bankruptcy Code (IBC), which gives the NCLT power to impose a moratorium on any other pending suit against the defaulter in any other court. Alok Industries owes close to Rs8,000 crore to SBI, of which Rs3,700 crore has turned non-performing. The firm’s overall outstanding debt stands at about Rs20,000 crore.
Separately, a Mumbai bench of the NCLT admitted bankruptcy proceedings against Monnet Ispat after the lead bank clarified the default amount.