The three-year-old insolvency proceedings in the Amtek Auto case are finally coming to an end with the NCLT of Chandigarh completing the hearing and reserving its judgement on Thursday.

The case, which started in July 2017, saw many twists and turns. Amtek Auto was one of 12 major companies that was identified by the RBI for bankruptcy proceedings. The company defaulted ₹12,600 crore to financial creditors, besides another ₹12,500 crore by its group companies such as Castex, Metalyst and Amtek Ring Gear.

Incidentally, the Ministry of Corporate Affairs has ordered the Serious Fraud Investigation Office to look into the affairs of Castex Technology.

In the initial round of bidding, UK-headquartered Liberty House and Deccan Value Investors placed bids and Liberty won on account of higher cash component. Later, Liberty claimed that access to crucial audit report was suppressed from bidders. It found negative information about asset values and discovered that liquidation value of assets was highly inflated. Following this, it decided not to proceed with the resolution plan.

Arvind Kumar Gupta, a senior NCLT lawyer, said the writedown of ₹7,000-crore fixed asset retrospectively and non-disclosure of many related party transactions had delayed the entire insolvency process.

Assets of the company were reduced to ₹4,400 crore from ₹15,000 crore including fixed assets write-off to ₹2,700 crore from ₹9,700 crore. The asset value was written down by 70 per cent between July 24, 2017 (the date on which insolvency process had started) and September 30, 2017 (before the submission of resolution plan), he said.

In August last, NCLAT directed NCLT Chandigarh to proceed with liquidation of Amtek. However, the Supreme Court stayed the liquidation and ordered the resolution professional to call for fresh bids last December. It received bids from US-based Deccan Value Investors LP, Motherson Sumi, SREI and Liberty. This time the liquidation value was reduced from ₹4,100 crore to about ₹1,500 crore.

In February, the lenders approved a resolution plan of ₹2,700 crore submitted by Deccan Value Investors despite receiving just ₹500 crore as upfront payment and the rest to be paid from future receivables of Amtek, which included tax refunds, sale of non-core real estate and other assets.

With the outbreak of the Covid-19 pandemic, Deccan Value Investors moved the apex court seeking more time to reassess its bid. However, last month the Supreme Court rejected the appeal of Deccan Value and directed NCLT Chandigarh to close the case hearing in three weeks.

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