The dedicated bankruptcy court, National Company Law Tribunal (NCLT), has ordered liquidation of textile maker Reid & Taylor India Ltd (RTIL) after investors put up by the employees association and other bidders failed to come up with a viable revival plan. The company owes over ₹4,100 crore to its lenders.
On Tuesday, a division bench of Bhaskar Pantulu Mohan and V Nallasenapathy in an oral order said that investors have failed to satisfy their net worth criterion before the NCLT and hence it had no option but to order liquidation of the company, preferably as a going concern.
The Mumbai bench of the NCLT had admitted the company for insolvency resolution in April 2018 after Edelweiss Asset Reconstruction Company (ARC) filed a case over default of ₹66 crore dues.
Another financial creditor, Finquest Financial Solutions, has also approached the tribunal against Reid & Taylor (India) for defaulting on around ₹775 crore dues.
Venkatesan of EY was working as resolution professional (RP) of the company.
“All our efforts have gone in vain and we are saddened the manner in which the industry misrepresented the matter, giving us no confidence to further afford an opportunity for anybody," the bench observed while ordering liquidation. It added that a detailed order will be passed and uploaded in due course.
The RTIL Employees’ Association, which is vying for the company as an investor, has decided to challenge the order in the National Company Law Appellate Tribunal (NCLAT).
When contacted, Nishit Dhruva, managing partner of law firm MDP Partners who is representing one of the financial creditors Finquest along with counsel Zal Andhyarujina, confirmed the development but said that he will be able to comment only after reading the detailed order.