MUMBAI: The Welspun Group has filed a plea before the Mumbai bench of National Company Law Tribunal ( NCLT) citing past defaults to seek the disqualification of top bidder Valor Estates in the debt resolution for Lavasa Corp, which was building what had then been billed as Independent India's first planned hill city.
The interlocutory application, filed through a Welspun subsidiary, also highlighted links between Valor's promoters and another defaulting debt-laden jeweller, links the plea claimed automatically disqualify the bidder to participate in any resolution process.
The plea, which ET has seen, cites Valor's ineligibility under Section 29A of bankruptcy code. The relevant section of the statute prevents debtors with a history of financial misconduct, wilful default or conviction from participating in a resolution process.
"This plea could delay the resolution for years. It is unlikely that either side will back down now. We could see this process being a long drawn one," said a person familiar with the matter.
The Welspun plea alleges that Pramod Goenka, the brother of Valor chairman Vinod Goenka, is a connected person as defined by the law, and is the promoter of Yash Jewellery. It has been classified as a non-performing asset since March 30, 2014, and remains in default to date, and is presently under liquidation.
Emails sent to resolution professional Udayraj Patwardhan and a Welspun spokesperson did not elicit any response.
A Valor spokesperson told ET that the company adheres to the bankruptcy code guidelines and the announced resolution process, which includes the relevant statute on bidding eligibility.
"All submissions-including confirmations relevant to Section 29A-have been and will be made to the resolution professional and the Committee of Creditors strictly in line with their directions," said the Valor spokesperson. We also respect the confidentiality obligations embedded in the IEOI/RFRP (bidding documents) and expect all stakeholders to do likewise."
'Chequered Past'
The Welspun plea, meanwhile, claimed that both Vinod and Pramod Goenka had executed personal guarantees to secure the loans availed by Yash Jewellery making them both connected to the defaulting company and hence disqualifying them from submitting a plan for Lavasa. Further another Valor subsidiary Goan Hotels & Realty was classified as NPA for loans due to Yes Bank.
The interlocutory application, filed through a Welspun subsidiary, also highlighted links between Valor's promoters and another defaulting debt-laden jeweller, links the plea claimed automatically disqualify the bidder to participate in any resolution process.
The plea, which ET has seen, cites Valor's ineligibility under Section 29A of bankruptcy code. The relevant section of the statute prevents debtors with a history of financial misconduct, wilful default or conviction from participating in a resolution process.
"This plea could delay the resolution for years. It is unlikely that either side will back down now. We could see this process being a long drawn one," said a person familiar with the matter.
The Welspun plea alleges that Pramod Goenka, the brother of Valor chairman Vinod Goenka, is a connected person as defined by the law, and is the promoter of Yash Jewellery. It has been classified as a non-performing asset since March 30, 2014, and remains in default to date, and is presently under liquidation.
Emails sent to resolution professional Udayraj Patwardhan and a Welspun spokesperson did not elicit any response.
A Valor spokesperson told ET that the company adheres to the bankruptcy code guidelines and the announced resolution process, which includes the relevant statute on bidding eligibility.
"All submissions-including confirmations relevant to Section 29A-have been and will be made to the resolution professional and the Committee of Creditors strictly in line with their directions," said the Valor spokesperson. We also respect the confidentiality obligations embedded in the IEOI/RFRP (bidding documents) and expect all stakeholders to do likewise."
'Chequered Past'
The Welspun plea, meanwhile, claimed that both Vinod and Pramod Goenka had executed personal guarantees to secure the loans availed by Yash Jewellery making them both connected to the defaulting company and hence disqualifying them from submitting a plan for Lavasa. Further another Valor subsidiary Goan Hotels & Realty was classified as NPA for loans due to Yes Bank.
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