NCLT seeks replies over Liberty House plea on bid

Sanjeev Gupta-led Liberty House moved the National Company Law Tribunal (NCLT) on Monday after the lenders rejected its bid for debt-ridden Bhushan Power & Steel.

The NCLT asked lenders and the resolution professional to file their replies by March 5, which is the next hearing date. Counsel for Liberty House argued that their plan should be considered as it might be a better offer than the other two applications.

Counsel argued that their bid was junked without opening it. The committee of creditors had rejected the bid on the grounds that it was submitted after the deadline.

For Bhushan Power & Steel, Tata Steel is estimated to have offered ~170 billion upfront to financial creditors, against JSW Steel’s ~110 billion. Abhishek Manu Singhvi, Tata Steel’s counsel, said: ‘’If Liberty’s bid is accepted, one is deliberately giving premium to dishonesty.” He said that five out of the seven requisite documents, like a certificate from a chartered accountant, were not submitted by Liberty House. Counsel also said that Liberty House’s proposal came much after the expiry of expressions of interest invitation in October 2017.

Bhushan Power & Steel owes about ~450 billion to its lenders. Liberty House, worth $6.8 billion, has had its eyes set on the difficult but promising Indian market for quite some time now.

Parliament had passed the insolvency law in 2016 to hold corporate defaulters accountable and assist banks in recovering their dues. Once cases are admitted by the NCLT, lenders are required to set up a committee for resolution within 180 days, which can be extended to 270 days after which the borrowing entity will be liquidated.