Former employees of Abhijeet Group companies Corporate Ispat and Alloys (CIAL) and Corporate Power (CPL) who have filed a winding-up petition in the Calcutta High Court have requested the bankers of the two companies to send in their views on the petition before the next hearing. Meanwhile, the management at State Bank of India (SBI) told FE the bank was scouting for buyers for the loss-making companies.
Banks have a total exposure of close to R6,400 crore to the two companies which had sought a loan recast via the corporate debt restructuring (CDR) cell but were turned down after they failed to rope in fresh investors. CIAL reported a loss of R65.71 crore in FY13 on a revenue of R249.5 crore, a fall of 21%.
In an advertisement published in a Kolkata-based English daily, the petitioners have urged other creditors — lenders and other former employees whose dues have not been cleared — to file affidavits in court. The advertisement read: “Any creditor…desirous of supporting or opposing the making of an order on the said petition should send to the petitioner or his advocate notice of his intention…” The hearing is scheduled for January 12.
In an order dated September 2, 2014, in the CPL case, justice Biswanath Somadder of the Calcutta High Court said, “The statutory notice has not been replied to. The company’s admission of liability is palpable from the emails exchanged between the parties as also from the company’s lack of response to the statutory notice.” The judge added there was no hesitation to hold that the company is liable to pay the sum as stated in the statutory notice and having failed to pay the said sum, the company is liable to be wound up.
A lawyer at one of the city’s top firms explained that if other creditors do not file affidavits and join the winding-up process before the first hearing, they would need to file a separate application seeking inclusion. Nine banks have loaned R4,712 crore to CPL while 21 banks, led by SBI, have an exposure of around R1,652 crore to CIAL. The Manoj Jayaswal-led Abhijeet Group is allegedly among the biggest beneficiaries of the controversial coal block allotments; the company got blocks in Jharkhand and Chhattisgarh.
CIAL operates a sponge iron plant and a solar power unit while CPL is primarily into coal-based power plants.
Two former employees, Nitol Das and Rajendra Kumar, employed by CIAL and CPL, respectively, had moved the court with a winding-up petition in July this year seeking compensation for unpaid salaries. The court, on August 26, had admitted the petition against CIAL, after which the company filed a recalling petition, which was eventually dismissed by the court on November 7.
Das has sought Rs 17.9 lakh from CIAL, while Kumar filed the petition on July 16 against CPL seeking compensation of more than Rs 6.43 lakh towards payment of his salary with an interest of 7% per annum. “The interest is to be calculated from the date of statutory notice, till date of actual payment,” Kumar said in his petition.
On December 5, the companies again appealed against the petitions filed by the employees but were dismissed by the court.
“The honourable division bench has been pleased to observe that Rajendra Kumar is entitled to unpaid salary and other benefits and has been pleased to dismiss the said appeal by imposing a cost of Rs 10,000 on the CPL,” Anunoy Basu, an advocate at the Calcutta High Court said. He added that the appeal by CIAL against the petition filed by Das was later withdrawn on the same day by the company.
An email sent to the companies seeking comments on the issue remained unanswered.
SBI management says the bank was scouting for buyers for the loss-making Abhijeet Group companies.
Banks have a total exposure of close to R6,400 crore to the companies — CIAL & CPL.
The companies had sought a loan recast but were turned down after failing to rope in fresh investors.
In an advertisement published in a Kolkata daily, the petitioners have urged other creditors to file affidavits in court.
Shayan Ghosh | The Financial Express