It took a heated bidding war to acquire the country’s largest, and now insolvent, manufacturer of edible oil for one bidding company — as much a beneficiary of the corrupt crony capitalist closet — to officially point fingers at the shenanigans of a bigger corporate.
Yoga guru Ramdev’s Patanjali Ayurved has cited a rule under the bankruptcy law to claim that Adani Wilmar, part of the Gautam Adani-led multinational conglomerate Adani Group, is not eligible to bid for Ruchi Soya, which is undergoing insolvency and bankruptcy proceedings.
This is because Pranav Adani, nephew of Gautam Adani and the Managing Director of Adani Wilmar — a 50:50 joint venture between Adani Group and Singapore’s Wilmar International — is married to Namrata, daughter of Vikram Kothari, the erstwhile promoter of Rotomac group who was arrested by the CBI in February on charges of loan fraud.
According to Section 29A of the Insolvency and Bankruptcy Code (IBC), a bidder for an insolvent company cannot be allowed to offer an insolvency resolution plan under the Corporate Insolvency Resolution Process (CIRP) if the bidding company is ‘connected’ to another stressed-loan corporate.
Now, the IBC was amended recently to expand the definition of a ‘connected’ persons to include relatives. An ordinance approved by the President on 6 June broadened the “connected person” to include “related party” and “relatives” such as husband, wife, father, mother and in-laws, among other familial relations.
However, because the amendment was made after both Patanjali and Adani had submitted their bids and resolution plans for Ruchi Soya, it is not clear yet whether the eligibility criteria will apply retrospectively in this case, it is reported.
The resolution professional (RP) for this case has reportedly sought at 8 to 10 days at the minimum for responding to the clarifications Patanjali has asked for.
Ruchi Soya — India’s largest edible oil seed extraction and refining company — was admitted to the CIRP in December 2017. The debt-ridden company has claims of around Rs 104 billion by financial creditors and Rs 360 million by operational creditors. But the company is still a prized asset with 3.72 million tonnes of oil seed extraction capacity across 10 locations and 3.30 million tonnes of refining capacity across 13 locations.
According to the Business Standard, the Committee of Creditors (CoC) consisting of the lenders met on 20 June to discuss the bids as well as the resolution plans by both companies.
Source: News Click, June 26, 2018