The fugitive promoters of Sterling Biotech will pay back the entire Rs 3,100 crore that they had settled with the lenders to wrest back the control of the insolvent company as per schedule. It will be all clean money, and not proceeds of crime, their lawyer informed the National Company Law Company Appellate Tribunal (NCLAT) on Monday.
Sources said promoters have already paid the promised 10% upfront money and the remaining will be paid within March 31, 2020. Apart from checking the source of funds that the promoters will pay to the lenders, the Enforcement Directorate (ED) will continue with its proceedings against the promoters for charges of money laundering.
The three-member NCLAT Bench, headed by Justice SJ Mukhopadhaya, on Monday said the money has to come from the individual account and directed Andhra Bank, the lead banker in the case, to intimate every payment to the ED.
“Our intention is clear. We are not bothered whether the promoter is fugitive or not. Let the money come to India. You pay the amount,” the Bench said. The lawyer assured that the money would be paid as per schedule.
The appellate tribunal had on September 7 set two preconditions – clean money certified by the ED and timely payment to the creditors – for the absconding promoters of Sterling Biotech to wrest back control of the insolvent firm. Failing which, the firm with a debt of over Rs 9,053 crore will be sent back to liquidation.
On a plea of Andhra Bank, the Mumbai Bench of the National Company Law Tribunal (NCLT) admitted corporate insolvency resolution process (CIRP) against Sterling Biotech on June 11, 2018 and ordered liquidation of the company.
The NCLAT subsequently set aside that order.
On March 8, 2019, exactly on the 270th day of the admission, Andhra Bank filed a petition under Section 12A of the Insolvency and Bankruptcy Code (IBC) for withdrawal of the CIRP upon receiving promises from the erstwhile promoters for an OTS, without detailing the offer such as the source of funds and timeline. It had the backing of 90.32% voting share of the CoC though.
Meanwhile, bond holders having dues of $300 million also came before the appellate tribunal on Monday. They requested the tribunal to direct the liquidator to admit their claim. Bond holders also alleged discrimination by the liquidator.
Source: Financial Express, September 24, 2019