NCLT orders RP to restart corporate resolution at KSK Mahanadi

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Two years after being admitted by the National Company Law Tribunal (NCLT), the process of resolving the cases of power producer KSK Mahanadi Power which drew Adani, Resurgent Power Venture and Vedanta has failed.

In a recent order, the Hyderabad court chamber ordered the resolution professional (RP) to restart the process, after Riddhi Siddhi Gluco Biols (RSGBL) claimed he had not had a fair chance to participate as a claimant even though the Committee of Creditors (CoC) made an exception for a Naveen Jindal group company, according to a court ruling.

PwC-backed RP Sumit Binani issued a notice to restart the resolution process on Friday, setting a deadline of November 29 for expressions of interest (EoI) and December 22 for firm offers.

After the RP rejected RSGBL’s request on June 28, 2021 to submit a declaration of intent on the grounds that the deadline for it – November 25, 2020 – had passed, the company filed a petition with the Hyderabad NCLT, seeking ordering the PR to either accept its EoI or restart the process so that other candidates can participate as well.

RSGBL, which makes liquid glucose and corn starch, told the court that just days before rejecting its EoI, the CoC passed a resolution on June 18 that a potential candidate for a resolution can submit a plan resolution itself or through one of the companies in its group. This, he claimed, was done to allow the Jindal Group to submit a bid for KSK Mahanadi through Jindal Power, although the original EoI was submitted by another company in the group, Jindal Steel & Power. (JSPL).

In April, JSPL sold 96.42% of Jindal Power to Worldone, a company owned by the promoter group JSPL, for 3,015 crore. It was against this background that the Jindal Group proposed to replace JSPL with Jindal Power, said one of the people involved in the resolution process.

The RP and CoC argued that the company’s plea should be dismissed as it would delay the process since the RP was about to accept firm offers.

On September 23, the court ruled that the RP must accept RSGBL and Jindal Power’s EoI and complete the resolution process within one month.

On October 1, the court issued a revised order directing the PR to restart the resolution process, but that order was not uploaded to its website until November 1, further delaying the process. The resolution professional declined to comment.

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