NCLT Turns Down Deloitte Exec’s Ap­point­ment as IRP in Lanco Case

The Economic Times - - Companies: Pursuit Of Profit - San­gita.Me­hta @times­group.com

Mumbai: The Na­tional Com­pany Law Tri­bunal (NCLT) has turned down the ap­point­ment of Vi­jayku­mar V Iyer of Deloitte as an in­terim res­o­lu­tion pro­fes­sional (IRP) to re­solve the .₹ 44,000-crore Lanco In­frat­ech de­fault, putting an end to big firms tak­ing up mul­ti­ple as­sign­ments that they can­not do jus­tice to. An in­di­vid­ual who is al­ready an IRP for two other com­pa­nies will not be able to find suf­fi­cient time to act as IRP for Lanco, which is al­ready a com­pli­cated case, the Hy­der­abad bench of the NCLT said. The case has to be dealt with in a time bound man­ner hence it may not be pos­si­ble if an in­di­vid­ual takes up more cases, it said. The court has ap­pointed Sa­van Go­di­awala as IRP based on the re- com­men­da­tion made by IDBI Bank which has ini­ti­ated the bank­ruptcy pro­ceed­ings. “This shows that the court is now be­com­ing aware of the fact that the job of IP is go­ing to lim­ited

TURNED DOWN

num­ber of peo­ple,” said Sameer Kakar, an in­sol­vency pro­fes­sional.

This rul­ing could be­come a bench­mark for those bid­ding to be res­o­lu­tion pro­fes­sion­als in mul­ti­ple cases. Since the process is new, the big four ac­coun- ting firms such as EY, KPMG, PwC and Deloitte have been get­ting man­dates to han­dle many big cases. The lack of in­fra­struc­ture else­where and ex­pe­ri­ence makes them an easy choice for banks too which are also new to the sys­tem.

Bank­ruptcy courts are bustling with hun­dreds of cases un­der the new IBC. At­ten­tion is on these NCLTs af­ter the Re­serve Bank of In­dia or­dered top 12 de­fault­ers be tried un­der the law. Lanco is among the12 cases di­rected by Re­serve Bank of In­dia to be re­ferred to bank­ruptcy court for speedy res­o­lu­tion. So far, in all large cases, banks have ap­pointed large con­sult­ing firms like EY.

The coun­sel for Lanco In­frat­ech ob­jected to ap­point­ment on grounds that just last week, Iyer was ap­pointed as IRP for Bi­nani Ce­ment as well as Bhushan Steel – which have a com­bined loan of .₹ 50,000 crore. The court ob­served that there is a se­ri­ous con­cern about that avail­abil­ity of the IRP.

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