Insolvency court dismisses StanChart’s petition in Ruchi Soya case1 min read . Updated: 07 Feb 2019, 09:43 PM IST
- Court dismissed bank’s plea to reclassify it as a financial creditor stating it is too late in seeking such a change
- Standard Chartered, which had filed the case on 3 September, is trying to recover $52.5 million
MUMBAI : The Mumbai bench of the National Company Law Tribunal (NCLT) on Thursday dismissed Standard Chartered Bank’s petition to reclassify it as a financial creditor to Ruchi Soya Industries Ltd, stating the lender is too late in seeking such a change.
Standard Chartered, which had filed the case on 3 September, is trying to recover $52.5 million (around ₹375 crore) from Ruchi Soya, which is undergoing insolvency resolution. The company owes more than ₹10,000 crore to banks and financial institutions. “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 nature of the debt was working capital and hence it qualifies as financial debt," Kapadia said.
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. Kapadia said that $105 million was disbursed of which $52.5 million is outstanding. However, the NCLT bench of judicial member V.P. Singh and technical member Ravikumar Duraiswamy, in its oral order, dismissed the plea, observing that the resolution professional had called for claims in January but the lender chose to come to court only in September.
On Thursday, the tribunal also directed Ruchi Soya’s resolution professional to comply with the Supreme Court order to hold a fresh meeting of the committee of creditors to decide on the resolution plans.
NCLT will next hear the case on 5 March after lenders decide on a successful bidder.
On 31 January, the Supreme Court had allowed a former Ruchi Soya director to participate in the fresh meeting of the company’s lenders and directed the resolution professional to provide copies of resolution plans.