NCLT orders liquidation of Kamineni Steel and Power

Our Bureau Hyderabad | Updated on October 26, 2018 Published on October 26, 2018

The National Company Law Tribunal, Hyderabad has ordered liquidation of Kamineni Steel and Power India, and appointed R Ramakrishna Gupta as liquidator.

In an order passed on Friday, Judicial Member Ratakonda Murali said all powers of the Board of Directors, key managerial personnel and the partners of the corporate debtor shall cease to have effect and all these powers will be vested with the liquidator.

In the insolvency case moved under the Insolvency and Bankruptcy Code, 2016, where a clutch of eight banks, including Indian Bank, Oriental Bank of Commerce and Andhra Bank were involved, the NCLT ordered liquidation following failure to achieve resolution.

Though there was a one-time settlement offer which some of the banks had agreed to, one of the lenders approached the Appellate Tribunal seeking reversal of the approval of the OTS at it was approved with less than 75 per cent voting of the Committee of Creditors. Since the matter reverted to the NCLT Hyderabad, it had to finalise the liquidation of the corporate debtor.

Earlier, the matter was struck after a Resolution Plan/One-Time Settlement was submitted by the corporate applicant, which was said to have been approved by the Committee of Creditors. The NCLT had approved the Resolution Plan/OTS. The Indian Overseas Bank and other financial creditors filed an appeal against the order and one more appeal was filed by United Seamless Tubulaar.

The NCLAT set aside the order of NCLT approving a resolution plan and directed liquidation.

While directing liquidation of the debtor, the NCLT appointed Ramakrishna Gupta as liquidator, and also provided directions against other legal proceedings against the debtor. The liquidator has been asked to initiate the liquidation process and submit its outcome within 75 days.

Published on October 26, 2018

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