Beleaguered pharmaceutical company Sterling Biotech’s settlement plant has hit a roadblock. The National Company Law Tribunal (NCLT) has said that the financial creditors accepting the settlement proposal from the Sandesara Group (parent company of Sterling Biotech) creates suspicion even as the company’s promoters have been absconding, the Indian Express reported.
The Mumbai bench of the National Company Law Tribunal (NCLT) questioning the company’s lenders, led by Andhra Bank said that “how the proposal submitted by the Sandesara Group is accepted by the financial creditors creates suspicion when the promoter/director is absconder and ED/CBI is searching for them,” The Indian Express cited.
The NCLT had sent notices to the Ministry of Corporate Affairs, Income Tax office, Enforcement Directorate (ED), SEBI, CBI and RBI for their representations before passing an order.
The group’s promoters — Nitin Sandesara and Chetan Sandesara have been accused of Rs 5,000-crore bank fraud and have been declared economic fugitives. The duo have reportedly been hiding in Nigeria even as ED had already attached and sealed their properties.
“We often get news from newspapers that various government agencies like Enforcement Directorate, CBI and other agencies are unable to trace the promoters of the corporate debtor (Sterling Biotech),” NCLT had said in an order earlier this week.
Sterling Biotech’s lenders had previously agreed to a one-time settlement plan (OTS) made under Section 12A of the Insolvency and Bankruptcy Code (IBC), 2016.
The Committee of Creditors had last week voted to withdraw bankruptcy proceedings against the company after accepting the OTS offer.
The offer made by group’s promoters had reportedly entailed a significant haircut of close to 65 per cent for the lenders. When the resolution professional (RP) asked the lenders to provide him with the details of the OTS offer, sources of funds, the time frame for payments to each lender, compliance with the RBI norms and whether the interests of all stakeholders have been provided for under the OTS offer, Andhra Bank informed the RP that they will directly address the issue with the Tribunal and did not submit any information to the RP, the NCLT order said.
Sterling Biotech was referred to the NCLT in June last year for insolvency proceedings under the Corporate Insolvency Resolution Process (CIRP).
Source: Financial Express, March 16, 2019