NCLT admits plea against Gitanjali Gems
The dedicated bankruptcy court has admitted the insolvency petition filed by ICICI Bank Ltd. against absconding diamantaire Mehul Choksi-promoted Gitanjali Gems Ltd. This is the first insolvency petition filed by the lender since a probe was launched by government agencies against Choksi and his nephew Nirav Modi for their alleged involvement in the over $2 billion PNB fraud.
Sagar Divekar, counsel for ICICI Bank, informed the Mumbai bench of the National Company Law Tribunal (NCLT) on Wednesday that Gitanjali Gems has defaulted on dues of about ₹608 crore.
“These dues were in the form of working capital loans and external commercial borrowings (ECBs),” said Divekar, adding the company owes over ₹5,980 crore to a consortium of banks led by ICICI. The consortium has given verbal consent to ICICI Bank to go ahead with the insolvency proceedings, he said.
Divekar said there are stocks, raw materials, movable and immovable assets, finished goods and trade receivables at Gitanjali Gems, which will help the lenders to recover their dues. “Once the Interim Resolution Professional (IRP) takes over the company, other operational creditors who have approached the tribunal to recover their dues can also submit their dues to the RP to be included in insolvency process” argued Divekar in the tribunal. “All the properties which are currently attached or confiscated by various investigating agencies will eventually come to NCLT to ascertain how those assets will be distributed among the various lenders.”
Admitting the insolvency petition, NCLT presiding officer MK Shrawat said, “The tribunal is of the view that the company is fit and proper to be referred to Corporate Insolvency Resolution Process (CIRP) and the investigation agencies including that of Serious Fraud Investigation Office, Enforcement Directorate and others can work with the RP with regards to recovery of assets of the company.”
The tribunal also approved Vijay Garg as the IRP for the company on the suggestion of the bank.