Edelweiss ARC to move NCLAT in Synergies case

MUMBAI: The first insolvency resolution under the Insolvency and Bankruptcy Code( I BC) is set to be challenged at the appellate tribunal because it has been alleged that the plan involves a related party transaction.

Edelweiss Asset Reconstruction Co Ltd is readying to approach the National Company Law Appellate Tribunal (NC LAT) in the case of Synergies Doo ray Automotive Ltd, said two people with direct knowledge.

Synergies Dooray’s plea for insolvency was admitted on January 23. There solution plan was submitted to NCLT on July 21, and the tribunal approved the plan on August 2. The resolution involves merging Synergies Dooray with Synergies Castings Ltd, a creditor and so-called related party, among others.

Edelweiss ARC has alleged that only the Synergies Castings plan was considered said one of the people cited earlier.

A spokesperson for Edelweiss declined to comment.

“The ARC is also alleging that the resolution plan is based on a sham transaction and the debt was transferred to another financial credit or at the last moment to allow a related party, a majority voting power in the committee of creditors,” said the second of the two people cited earlier.

Sekhar Movva, president at Synergies Dooray said that NCLAT will see merit in the NCLT order