ICICI Bank has finally dragged scam-ridden Gitanjali Gems to the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC). Leading business newspaper, DNA Money, had on September 11 reported that ICICI Bank was taking initial steps of sounding out prospective resolution professionals for the likely move to NCLT.
The Mumbai bench of NCLT heard the case filed by Gitanjali’s banker, who argued that the company is a case “fit and proper to be referred to Corporate Insolvency Resolution Professional”.
ICICI Bank said Rs 608 crore was due from the company out of Rs 5,980 crore due to a consortium of 33 banks, including Punjab National Bank, Allahabad Bank, Bank of Baroda, Central Bank of India.
Name of Vijay Garg was suggested as the resolution professional.
ICICI Bank had in September floated Expression of Interest for prospective resolution professionals experienced in handling resolution of scam-tainted companies, DNA Money had reported. The move assumed significance because of the nature and scale of alleged frauds committed by the company management, which has led to the involvement of Serious Fraud Investigation Office.
SFIO is expected to work in close coordination with the resolution professional following a recent landmark judgement of NCLT.
In the bankruptcy case of another disgraced company Rei Agro, the Kolkata-bench of NCLT directed the freeing of assets of the company from the Enforcement Directorate to be distributed among creditors, who collectively owns Rs 10,800 crore.
ICICI Bank was earlier depending on the Debt Recovery Tribunal or selling mortgaged assets through Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest, or Sarfaesi, Act to recover its money, and lenders had earlier ordered a forensic audit of the books of Gitanjali Gems which has now been completed.