The SBI-led consortium of lenders has finally moved the NCLT against Jet Airways for initiating the insolvency proceedings for the beleaguered airline, PTI reported. The application has been filed under section 7 of Insolvency and Bankruptcy which deals with financial creditors. The Mumbai bench of the tribunal will hear the matter on 19 June 2019, the news agency reported. Earlier today, Jet Airways also saw the resignation of Independent Directors Ashok Chawla and Sharad Sharma on Tuesday as the airline is dragged to NCLT for insolvency.
Ashok Chawla and Sharad Sharma have “resigned as Independent Directors of the company with effect from 17 June 2019,” Jet Airways announced in a BSE filing. The same was attributed to the non-compliance of the board with the provisions of the Companies Act, non-appointment of additional directors and the halt in the process of bank-led resolution plan, Jet Airways said in a statement.
Earlier this week, State Bank of India said that a consortium led by the bank has decided to drag the beleaguered airline to the National Company Law of Tribunal (NCLT) as it had been waiting for a concrete resolution plan for long now. “After due deliberation, the lenders have decided to seek resolution for Jet Airways under the bankruptcy code since only a conditional bid was received,” SBI had announced in a statement. The lenders have tried to find a solution outside Insolvency and Bankruptcy proceedings but the same could not materialize and hence the lenders have decided to resort to IBC, SBI added. Further, the prospective investor has asked for SEBI exemption which will work better under IBC.
Two of the Jet Airways’ operational creditors, Shaman Wheels and Gaggar Enterprises, had moved NCLT on 10 June 2019, asking for insolvency proceedings against the grounded airline. The same was adjourned by the Mumbai bench of NCLT to further hearing on 20 June.
Troubles brewed up for Jet Airways in 2018 after it missed payments to the consortium of lenders. On 25 March 2019, Naresh Goyal and his wife Anita Goyal stepped down from the board of members under the resolution plan which was approved by the Jet Airways board. The airline announced a temporary suspension of its operations on 17 April 2019 after months of struggling to stay afloat. Jet Airways owes more than Rs 8,000 crore to the consortium of banks led by SBI; vendor dues of over Rs 10,000 crore and salary dues of over Rs 3,000 crore.
Source: Financial Express, June 19, 2019