Mahesh Bhupathi, Lara Dutta file insolvency plea against Gitanjali Gems
Tennis player Mahesh Bhupathi and his wife, actor Lara Dutta, have filed an insolvency petition against jewellery manufacturer Gitanjali Gems Ltd. The celebrity couple endorse the Gitanjali brand.
The case was listed for hearing before the Mumbai bench of the National Company Law Tribunal on Wednesday.
“Both the brand ambassadors have a two-year contract with the company for public appearances. During the tenure of the contract there were some cancellations for which the company did not pay its dues to the celebrity couple,” said a person with direct knowledge of the matter.
Mahesh Bhupathi’s counsel Aagam J. Doshi and a Gitanjali Gems spokesperson declined to comment. Mint could not ascertain the pending dues for which Bhupathi and Dutta initiated insolvency proceedings against Gitanjali Gems under the Insolvency and Bankruptcy Code (IBC).
Gitanjali Gems had debt of Rs7,185 crore at the end of September. The company had reported a net profit of Rs63.8 crore for the September quarter, an increase of 41% from a year ago.
According to a spokesperson for Gitanjali Gems, the couple had a two-year contract for public appearances for four days in 2016 and 2017. So far, Bhupathi and Dutta have made public appearances for only two days.
“The entire services (four work days) are yet to be performed and as such the payment, if at all, is due only on pro rata basis for the part services performed. However the celebrities are insisting that the entire payment is due and payable according to their interpretation of the agreement. They have therefore filed an application before NCLT for claiming entire dues and the matter is pending for adjudication,” the spokesperson said in an email.
At least 400 companies are currently undergoing resolution under the insolvency and bankruptcy code. According to a study of 515 cases by Bhargavi Zaveri of the Indira Gandhi Institute of Development Research, about one in every two petitions has been filed by operational creditors (such as suppliers and distributors).
Some unique cases of vendors taking to companies to insolvency include a stock exchange, a public relations firm and advertising firms. On 13 December, BSE Ltd filed petitions against firms that have failed to pay their annual listing fees. The exchange has identified 130 such companies and it has already filed insolvency proceedings against seven firms.
Fortuna Public Relations, a public relations firm, filed a case against Reliance Communications Ltd seeking to clear dues of Rs43 lakh. Jigsaw Solutions, an advertising agency, had moved NCLT against Stayzilla, an online homestay aggregator, on 7 September. The insolvency petition, now admitted by NCLT, claimed that Stayzilla had defaulted on paying dues of Rs1.69 crore.