Standard Chartered asks NCLT to change lender tag1 min read . Updated: 26 Sep 2018, 11:27 PM IST
Standard Chartered says it must be classified as a financial creditor to Ruchi Soya
Mumbai: The Standard Chartered Bank on Wednesday told the Mumbai bench of the National Company Law Tribunal (NCLT) that it should be classified as a financial creditor to Ruchi Soya Industries Ltd, instead of its current status as an operational creditor.
Standard Chartered, which had filed the case on 3 September, is trying to recover $52.5 million from Ruchi Soya, which is undergoing insolvency resolution. The company owes more than ₹ 10,000 crore to its lenders.
Ruchi Soya’s resolution professional has categorized Standard Chartered as an operational creditor. Under the insolvency resolution process, financial creditors stand a better chance than operational creditors to recover their dues.
“There was a tripartite agreement between Standard Chartered Bank, Ruchi Soya and its subsidiary Avanti Industries. Under this agreement, Ruchi Soya received the money from Standard Chartered to supply goods to Avanti, and subsequently, Standard Chartered had to collect money from Avanti," Shyam Kapadia, counsel for Standard Chartered, told NCLT.
The Hong Kong branch of Standard Chartered had given a trade finance facility to Ruchi Soya to supply goods to Avanti and the company had agreed to repay the money along with interest, which is purely a financial transaction, the Standard Chartered counsel argued. The bank further argued that the total loan disbursed was $105 million of which the outstanding is $52.5 million.
Standard Chartered is the second Ruchi Soya lender after the Australia and New Zealand Banking Group (ANZ Bank) to seek the status of a financial lender. Last month, the tribunal had directed the resolution professional to classify ANZ Bank, to which the company owes $64 million (around ₹ 465 crore) as financial creditor.
The division bench of NCLT presided over by M.K. Shrawat and Ravikumar Duraisamy adjourned the matter till 4 October, saying that even the resolution professional should get chance to be heard and only then will the tribunal rule in the matter.
On 3 October, the tribunal will also hear the plea filed by Patanjali Ayurved Ltd, which has challenged the approval of Adani Wilmar’s bid for Ruchi Soya, arguing that under the Insolvency and Bankruptcy Code relatives of a wilful defaulter can’t participate in a bidding process.
The Standard Chartered spokesperson did not respond to a request for comment. An email and a text message to Shailendra Ajmera of EY, who is the resolution professional, also did not elicit any response till the time of filing the story.