This would be another case where recoveries are likely to be less than 5% of the total exposure, estimated at about Rs 1,500 crore.
The Mumbai Bench of National Company Law Tribunal (NCLT) ordered the winding up of the entity, one of the group companies promoted by Choksi. The court appointed Santanu T Ray, a senior partner of AAA Insolvency Professionals LLP, as liquidator for this company. Prior to the liquidation order, Vijay Kumar Garg was appointed as the resolution professional dealing with the corporate insolvency resolution process.
More than 70 percent lenders voted in favour of liquidation promoting the RP to file for a liquidation application.
“In view of the decision of the Committee of Creditors (CoC), we are inclined…….to initiate liquidation process against the corporate debtor,” the court said in the order.
The ruling came on an insolvency petition, filed by ICICI Bank in 2018 against the company, which was allegedly involved in a money laundering case reported by the Punjab National Bank. The insolvency petition filed against the parent company of Mehul Choksi, Gitanjali Gems, is pending adjudication with the dedicated insolvency court.
“The liquidator began the process of liquidation seeking related documents,” said a banker.
The resolution process of the Nakshatra Brands had to go through quite a few hurdles. The ministry of corporate affairs had filed an application against the company seeking directions for recovery of amounts in the financial fraud, following which the Tribunal passed an ex-parte injunction order where the Corporate Debtor was barred from removal, transfer or disposal of fund and assets. Since the properties and assets were under the control and custody of the authorities, the RP could not carry out the effective resolution process.
“We will make every endeavour to unlock the assets mortgaged to Financial Creditors by using our experience of other companies in expediting the de-attachment and sale of the assets for distribution to stakeholders,” said Anil Goel, founder of AAA Insolvency Professionals LLP.
