The National Company Law Appellate Tribunal (NCLAT) has directed the Centre to take appropriate steps against US-based Ingen Capital Group, its managing director and other directors for failing to implement its approved resolution plan for Chennai-based Orchid Pharma.
The NCLAT has asked the government to take up the matter with the US through the Ministry of Corporate Affairs, if the company does not have an office in India. The NCLAT, while dismissing the appeal of Ingen, has also slapped a cost of Rs 10 lakh on the company in favour of the CoC to be paid within 30 days.
Ingen Capital was the successful resolution applicant for Orchid, but it failed to implement its resolution plan as approved by the committee of creditors and the Chennai NCLT. Though the company was given opportunity to deposit the upfront amount, it failed to deposit the same, leading to cancellation of the resolution plan on the request of the resolution professional. Currently, a fresh bidding for finding prospective investors for Orchid is underway.
Ingent had moved the NCLAT with an appeal against the direction asking it to pay up the amount, submitting that without getting certain information it had sought, it will not possible to deposit the amount pursuant to the approved resolution plan.
Irked by the company’s submission, laying conditions which were not in the resolution plan, the NCLAT ordered a show-cause notice on the directors of Ingen, namely Umesh Bhatia and authorised representative Harish Bhatia, as to why an appropriate action won’t be not taken against them, and the NCLT, the government and its agencies be not asked to take appropriate steps against the company and its directors and why cost not be imposed on them.
The NCLT had declared invalid the approved resolution plan by Ingen as the company had failed to bring in the promised money even after the stipulated time and despite the bench giving it an option to pay one-third of the amount to take the proceedings further.
The resolution plan by Ingen Capital was approved by the NCLT on September 17, 2018, after the CoC had cleared it. As per the resolution plan, which was for Rs 1,490 crore, Ingen was to infuse Rs 1,060 crore within five days of the approval of the plan.
When the company failed to pay the amount, the RP moved the NCLT, and on October 10, 2018, it ordered Ingen to deposit the upfront amount into the escrow account of financial creditors. With Ingen failing to pay up the upfront money, the NCLT had directed it to pay one-third of the payment due to financial creditors which was around Rs 334 crore, in a fixed timeframe. Aggrieved by this, Ingen moved the NCLAT with an appeal.
Source: Financial Express, May 12, 2019