NCLAT upholds insolvency proceedings against Jaiprakash Associates
This story was originally published at 18:50 IST on 6 December 2024
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--NCLAT upholds insolvency proceedings against Jaiprakash Associates
--NCLAT junks Jaiprakash Associates plea on asset transfer to Jaypee Infra
NEW DELHI – The National Company Law Appellate Tribunal on Friday upheld admission of insolvency proceedings against Jaiprakash Associates Ltd. The appellate tribunal said that no grounds were made out by the suspended board of Jaiprakash Associates to interfere with the Allahabad bench of the National Company Law Tribunal's order to start insolvency proceedings against the company.
The appellate tribunal also dismissed Jaiprakash Associates' plea seeking approval of a scheme of arrangement with Jaypee Infrastructure Development Ltd., a 100% special purpose vehicle of Jaiprakash Associates. The appellate tribunal said that it did not find any infirmity with the Allahabad tribunal order to reject the scheme. The scheme had proposed transfer of a part of debt and land parcel of Jaiprakash Associates to Jaypee Infrastructure.
On Jun. 3, the tribunal had admitted ICICI Bank's insolvency petition under the Insolvency and Bankruptcy Code for a debt of INR 12.69 billion. While the total debt against the company was INR 135.90 billion, the counsel for suspended board of company had said that the debt aggregating to INR 25.45 billion stood settled and only INR 118.53 billion remained.
The counsel for the suspended board had said that they had given a one-time settlement offer to the lender ICICI Bank for payment of INR 161.16 billion within 18 weeks of the bank's acceptance. An application regarding this was moved in the Allahabad tribunal. However, it rejected the plea after noting that ICICI Bank had not considered their proposal and it was too late now, the counsel had said.
The suspended board had said that Jaiprakash Associates was a running and operating company, and an engineering giant, and was presently executing 14 giant projects. These are projects for making tunnels, hydroelectric power projects, expressways for Indian and foreign governments, said the suspended board. Jaiprakash Associates was willing to deposit INR 21.50 billion of the one-time settlement within four weeks, the board had argued in June.
In the case relating to the scheme of arrangement, Yamuna Expressway Industrial Development Authority had allotted a land parcel to Jaiprakash Associates. However, as Jaiprakash Associates defaulted on payments, the authority had cancelled the land parcel allotted to the company in 2020. On Jun. 3, the tribunal had observed that since the underlying asset envisaged by the scheme was under dispute, the scheme was not feasible.
On Friday, shares of Jaiprakash Associates ended 5% higher at INR 7.57 on the National Stock Exchange, while shares of ICICI Bank closed 0.6% lower at INR 1,328.75. End
Reported by Surya Tripathi
Edited by Ashish Shirke
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