New Delhi, June 17 (SocialNews.XYZ) Some serious allegations and questions have been raised with respect to the Siva Industries and Holdings case that has grabbed the limelight because public sector banks have agreed to settle with the promoter of Siva Industries a huge loan of Rs. 4,863 crore at just Rs 323 crores with a recovery of only 6.5 per cent, Zee Biz reported.
As per the report, interestingly the CoC member and biggest bank of the country SBI dissented against the settlement proposal.
Moreover, the case becomes even more important when the lenders are withdrawing the bankruptcy process of Siva Industries and Holdings.
Further, the important to note here is the settlement amount accepted by banks is said to be even lower than the liquidation value of Siva Industries and Holdings and it will result in a loss of approx. Rs. 4,700 crore public money, the report added.
Additionally, the public sector bank Canara Bank privately sold its exposure of Rs. 1,148 crore to an ARC - International Asset Reconstruction Company Private Limited (IARC).
It is feared that this case will set a bad precedent and defeat the purpose of the Insolvency and Bankruptcy Code, 2016. As if things are to be settled outside court with such a meagre sum, then IBC may lose its relevance.
Interestingly IDBI Bank as the lead banker is settling the case with the same promoter who was earlier charged by CBI for defrauding the same lender to the tune of Rs 600 crore along with the other then posted senior officials of the bank, the report said.
Application for withdrawing insolvency proceedings is currently pending before NCLT, Chennai Bench, and listed on 18 June 2021 for further hearing.
Lenders of Siva Industries and Holdings Limited, founded by C. Sivasankaran who is the former promoter of Aircel have filed applications under Section 12A of Insolvency and Bankruptcy Code 2016 (IBC) in National Company Law Tribunal (NCLT), Chennai Bench for withdrawing the insolvency proceedings against company.
-Siva Industries and Holding owes Lenders approx. Rs 4,863 crore.
-Majority of Lenders ,mainly IDBI Bank as lead lender, Central Bank of India, LIC, PNB etc have agreed to settle the said debt of Rs. 4,863 crore for Rs. 323 crore by accepting the one-time settlement (OTS) offer from Promoters' of Siva Industries resulting in meagre 6.5% recovery for them.
It is claimed by the lead banker of CoC IDBI Bank that there was no successful resolution applicant that's why OTS route is adopted for resolution of debt but as per reports the bidder Royal Partners Investment Fund alleged that the bid was deliberately ignored, the report said.
Source: IANS
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