The Mumbai bench of the National Company Law Tribunal (NCLT) has refused to accept the settlement plan approved by the committee of creditors (CoC) and proposed by promoters of the fraud-hit Sterling Biotech.
Questioning the lenders, led by Andhra Bank, the bench stated that “how the proposal submitted by the Sandesara Group is accepted by the financial creditors creates suspicion when the promoter/director is absconder and ED/CBI is searching for them.”
Before passing an order, the NCLT issued notices to the Ministry of Corporate Affairs, Income Tax office, Enforcement Directorate (ED), SEBI, CBI and RBI for their representations.
The Sandesara brothers – promoters of the Sterling Biotech group – are wilful defaulters to the tune of Rs 5,000 crore and have been declared economic fugitives. While ED had attached and sealed their properties, the brothers had reportedly fled to Nigeria.
“We often get news from newspapers that various government agencies like Enforcement Directorate, CBI and other agencies are unable to trace the promoters of the corporate debtor (Sterling Biotech),” NCLT had said in an order earlier this week.
Lenders had earlier agreed to a one-time settlement plan (OTS) made under Section 12A of the Insolvency and Bankruptcy Code (IBC), 2016.
On March 7, the CoC voted to withdraw bankruptcy proceedings against the company after accepting the OTS offer.
The promoters reportedly made an offer which entails a significant haircut of close to 65 per cent for the lenders. When the resolution professional (RP) asked the lenders to provide him with the details of the OTS offer, sources of funds, the timeframe for payments to each lender, compliance with the RBI norms and whether the interests of all stakeholders have been provided for under the OTS offer, Andhra Bank informed the RP that they will directly address the issue with the Tribunal and did not submit any information to the RP, the NCLT order said.
Sterling Biotech was referred to the NCLT in June last year for insolvency proceedings under the Corporate Insolvency Resolution Process (CIRP).