The National Company Law Appellate Tribunal (NCLAT) on Monday asked the fugitive promoters of Sterling Biotech to pay back within a month the entire Rs 3,100 crore that they had settled with the lenders to regain control of the insolvent firm. Or else, the company will go for liquidation.
The three-member NCLAT bench, headed by chairperson Justice SJ Mukhopadhaya, said: “In case the amount does not come within 30 days from the date of the order, the company will go for liquidation.” In that event, the appellate tribunal will restore the order of liquidation of the firm, it added.
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. On March 8, 2019, 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 Corporate Insolvency Resolution Process (CIRP), upon receiving promise from the erstwhile promoters for a one-time settlement. Section 12A gives discretionary power to NCLT to allow withdrawal of the CIRP with the condition that the proposal has to have at least 90% affirmative votes of the lenders.
However, the NCLT had on May 8 rejected the proposal and referred the company for liquidation. However, subsequently, NCLAT set aside the lower court order. The appellate tribunal had on September 7 set two preconditions – clean money certified by the ED and timely-payment to the creditors – for the 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.
Source: Financial Express, November 19, 2019