A Bench of the National Company Law Tribunal (NCLT) has ordered the liquidation of debt-ridden dairy and allied products firm Kwality Limited, after the Committee of Creditors (CoC) rejected the resolution plan submitted by Haldiram Snacks, the sole bidder. The court three of the New Delhi Bench of NCLT passed the liquidation order on Monday, which was made available on the tribunal’s website on Thursday.
The company, which was founded in 1992, owes over Rs 1,900 crore to its lenders, and was admitted into insolvency in December 2018 on a petition moved by Punjab National Bank (PNB) and global private equity firm KKR. Despite several extensions in the date to submit resolution plans, a joint bid of Haldiram Snacks and Pioneer Securities was the only plan in contention. Haldiram Snacks had initially made an offer of Rs 130 crore, improved it to Rs 142 crore, and finally revised it one more time to Rs 145 crore. A majority of the funds in the resolution plan had been allocated to the financial creditors.
Haldiram Snacks’ plan, however, did not pass muster as it did not have over 66 per cent lenders voting in its favour and was therefore rejected. Following the rejection of the plan by CoC, the resolution professional of Kwality moved an application to liquidate the company as the time period of 270 days for completion of insolvency process was long over.
Kwality Limited, which makes allied milk products such as milk ghee, milk powders, lassi, chaach and flavoured milk, has also been under the lens of investigative authorities for cheating a consortium of banks led by Bank of India.
In September last year, the Central Bureau of Investigations had registered a case of fraud against the company’s directors Sanjay Dhingra, Siddhant Gupta and Arun Srivastava.
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