Boxing gloves sit in a box (Photographer: Jerome Favre/Bloomberg)

Binani Cement Insolvency Resolution Mired In Petitions At NCLT

The National Company Law Tribunal in Kolkata today heard four of 14 petitions that have been filed against the ongoing Binani Cement Ltd. insolvency proceedings.

These petitions have been filed by parent Binani Industries Ltd., unsuccessful bidder UltraTech Cement Ltd., the resolution professional in charge of the insolvency process, two creditor banks and operational creditors. Dalmia Bharat Ltd., the winning bidder for Binani Cement, filed an affidavit yesterday.

The petitions cover grouses ranging from lack of transparency to disagreement with the approved resolution plan.

These are the key issues according to officials involved in the proceedings.

Binani Group: Five Petitions

  • Lack of transparency in the resolution process.
  • Inadequate sharing of information by the resolution professional.
  • Expenses claimed by the resolution professional.
  • Request to terminate insolvency.

UltraTech: Three Petitions

  • Questions the evaluation criteria used to pick the winning bid.
  • Claims circumvention of its objections by the resolution professional and Committee of Creditors.
  • Seeks quashing of the resolution process on basis the first two applications.

MSME Creditors: One Petition

  • Claims not considered by resolution professional.

The resolution professional has reportedly filed a petition alleging non-cooperation by the incumbent Binani management and other process issues, whereas two creditors have raised concerns over the the haircuts proposed in the winning resolution plan.

Matters Taken Up Today

The resolution professional has reportedly filed a petition alleging non-cooperation by the incumbent Binani management and other process issues, whereas two creditors have raised concerns over the the haircuts proposed in the winning resolution plan.

A petition filed by Braj Binani, in his capacity as director of Binani Industries, has questioned the use of funds by the resolution professional, alleging he used Rs 72.5 lakh of the funds allocated to the insolvency process to purchase insurance. The NCLT directed Binani to approach insolvency regulator – the Insolvency and Bankruptcy Board of India – to redress issues with the resolution professional.

Further, it directed the resolution professional to submit the bifurcation of resolution cost to the Committee of Creditors.

Binani Industries has alleged in one of its petitions that the resolution professional did not allow its directors to attend CoC meetings. The resolution professional responded by saying that notices for the meetings were sent to the company but the directors chose not to attend in person and sent their representatives instead.

The resolution professional also brought up an inter-corporate transaction between Binani Cement and Binani Industries during the hearing. He said that Binani Cement had extended a Rs 1,100 crore loan to Binani Industries for buyback of shares of a subsidiary. The interest on this loan was waived off by Binani Cement, the resolution professional pointed out. On March 12, the resolution professional had filed a forensic audit report, detailing this and several other related party transactions, with the NCLT.

Ultratech, which has now entered into a commercial understanding with Binani Industries, had not submitted any revised plan for Binani Cement, said the resolution professional in court today. It had only sent a revised offer via email which the committee of creditors had rejected, the resolution professional stated before the NCLT.

The Kolkata NCLT will now hear the matter on March 27.

With inputs from Gurvinder Singh.