MUMBAI: Liberty House, the London-headquartered metals group owned by UK-based businessman Sanjeev Gupta, may be excluded from bidding for companies undergoing insolvency resolution after being barred from making offers for ABG ShipyardNSE -3.13 % two days ago over a loan default, said people aware of the matter.
This followed ABG’s bankers and its insolvency professional coming to know that a fully owned subsidiary of Liberty House had defaulted on a Rs 18 crore loan to Exim Bank.
Under the Insolvency and Bankruptcy Code (IBC), defaulters can’t bid for companies unless they repay their dues. This extends to related parties and connected persons as well.
“It’s like this — if you fail in your 12th examination, you will not be able to get admission in any college that offers graduation. Others (bankers, insolvency professionals) will have to disqualify Liberty House, there is no way around this,” said a senior banker who is part of the ABG Shipping resolution process.
Liberty House didn’t respond to queries.
The UK group has also bid for Amtek Auto and Castek Technologies, the latter a subsidiary of Amtek Auto and Adhunik Metaliks. Earlier, the committee of creditors had refused to open its bid for Bhushan Power and Steel on the grounds that it had been submitted after the deadline.
Liberty House had approached the National Company Law Tribunal (NCLT) to challenge this.
Tata SteelNSE -1.49 % is set to acquire Bhushan, ET reported in March.
ET was the first to report on April 17 that lenders to ABG Shipyard had rejected the resolution plan of sole bidder Liberty House for a second time.
Amtek Auto’s lenders and the insolvency professional are planning to seek NCLT’s view on Liberty House’s standing, according to two people with direct knowledge of the matter. They had previously accepted the bidder’s resolution plan for the company.