Binani Cement’s insolvency resolution could become a test case for the Insolvency and Bankruptcy Code (IBC), with the Supreme Court slated to start hearing the arguments in this case Friday. While the Committee of Creditors had earlier selected a bidder — Rajputana Properties Pvt Ltd (RRPL) — to takeover Binani Cement during the course of the Corporate Insolvency Resolution Process (CIRP), the panel later expressed its willingness to go ahead with an out-of-court settlement if Binani Industries — the promoters of Binani Cement — had the approval of the Supreme Court, which will be hearing the submissions Friday.
The Rajputana Properties Pvt Ltd (RPPL) — a consortium of Dalmia Cement (Bharat) Ltd and Piramal-Bain Capital — has alleged foul play in the manner in which Binani Industries Ltd is moving for an out of the court settlement. In a letter to the Reserve Bank of India and to lenders of Binani Cement on Tuesday, RPPL has argued that after selecting a bidder through the CIRP and then allowing for out-of-court settlement will subvert the due process set under the IBC.
RPPL, quoting a forensic audit into Binani Cement argued that the promoters of the cement company have allegedly siphoned off Rs 2400 crore from the company through various means, and putting the company back in the hands of same promoters will be against the spirit of the IBC. Queries sent to Binani Cement and Binani Industries on Thursday did not elicit any response. The committee of creditors (CoC) had on March 14 declared RPPL a successful bidder for corporate insolvency resolution through a majority vote. Binani Industries Limited later proposed to settle with the members of the CoC outside the CIRP with an amount higher than offered by RPPL.