Sterling RP moves NCLT for possession of assets
Vishal Jain, the resolution professional for Sterling SEZ and Sterling International, has told the NCLT that it would be impossible to proceed with the resolution process without the assets
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Mumbai: The insolvency resolution professional (RP) for Sterling SEZ & Infrastructure Ltd and Sterling International Enterprises Ltd on Wednesday sought possession of the assets of the two companies from the Enforcement Directorate (ED) to proceed with their resolution process.
The ED had attached properties worth over ₹ 4,700 crore belonging to the two Sandesara group companies in June 2018, following a complaint of fraud by Andhra Bank. Vishal Jain, interim resolution professional (IRP) for the two companies, has now informed the Mumbai bench of the National Company Law Tribunal (NCLT) that it would be impossible to proceed with the corporate insolvency resolution process (CIRP) without possession of those assets.
“We are working on getting expression of interest (EoI) for the resolution process but since the assets of both the companies—Sterling SEZ & Infrastructure and Sterling International Enterprises—are attached with the investigation agency, it is very difficult for us to ascertain the right value of the assets as well as to get interested parties," Jain told the tribunal.
Srei Infrastructure Finance Ltd has filed an insolvency petition against both companies for defaults totalling over ₹ 297 crore. Before that, on 10 June, Sterling Biotech, the listed parent of the two companies, was also admitted by the NCLT Mumbai for insolvency resolution for defaulting on more than ₹ 5,400 crore.
The special counsel for the ED argued that the investigation agency wants to file its reply on the petition filed by the RP and since the New Delhi bureau of the ED is investigating the whole issue, the agency needs two weeks’ time to file its response. A bench comprising Bhaskara Pantula Mohan and V. Nallasenapathy adjourned the case to 28 November and asked the ED to file its response before the next date of hearing so that the RP can file its response.
The ED is investigating charges of fraud made by Andhra Bank against the company. The lender has alleged that Sterling had taken loans of over ₹ 5,000 crore from various lenders in a fraudulent manner, which later became non-performing loans.
In January, the ED had arrested former executive director of Andhra Bank Anup Prakash Garg for violations under the Prevention of Money Laundering Act (PMLA).
Presenting Garg in court, the agency had said it had come across “certain entries" in a diary seized by the income tax department in 2011 which showed various cash payments amounting to ₹ 1.52 crore made to one “Mr Garg, director, Andhra Bank" by the Sandesara brothers between 2008 and 2009.
The Central Bureau of Investigation had booked Garg, directors Chetan Jayantilal Sandesara, Nitin Jayantilal Sandesara, Dipti Chetan Sandesara and Vilas Joshi, chartered accountant Hemant Hathi and some unidentified people in connection with the case. Currently, the Sandesaras are absconding.
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