March 10, 2021 3:00:36 am
The Insolvency and Bankruptcy Board of India (IBBI) and the Ministry of Corporate Affairs (MCA) is closely watching the developments at the UK-based Liberty House Group (LHG) after reports of the company’s alleged financial troubles emerged, senior government officials said. The officials, however, said there has been no communication on the issue either from lenders or the company.
“There is only one case pending against Liberty House which is for initiation of criminal proceedings against the company for failing to go ahead on the Amtek deal after approvals. We are observing the reports for now,” a senior official said. Earlier this week, reports suggested that the firm may be having troubles finding new lenders after one of its biggest lenders, Greensill Capital, was asked by regulators to cut exposure to Gupta Family Group (GFG) Alliance. “We have adequate funding for our current needs while we bridge the gap to refinancing the business,” LHG founder Sanjeev Gupta told UK trade unions, as per a Reuters report.
In India as well, Gupta and his companies have had their run-in with authorities. Liberty House had placed a winning bid of Rs 4,025 crore for Amtek Auto in July 2018, which was taken to insolvency by its lenders a year earlier in July 2017. The resolution plan included an upfront payment of Rs 3,225 crore for the lenders, and another Rs 500 crore for “stabilising and improving” the operations of Amtek Auto.
Despite repeated attempts by the lenders and the resolution professional, however, LHG did not go ahead with the plan and cited “blatant discrepancies in the condition of machinery, valuations, and representations made in the information memorandum and valuation reports”.
This had irked the IBBI, which had then approached the SC seeking to initiate action against the company for not following through with the resolution plan. Apart from Amtek Auto, Gupta’s company had also bid for ABG Shipyard and Bhushan Power but failed to complete the resolution processes.
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