The tussle for Binani Cement is set to snowball into a major legal battle with all the parties blaming each other for alleged violation of the process. While Binani Cement questioned the timing of the disclosures made by the resolution professional about alleged ‘fraudulent transactions’ to the tune of ₹2,400 crore, UltraTech has highlighted the lack of transparency on the part of the resolution professional.

The resolution professional has also filed an application in the NCLT alleging fraudulent transactions involving the promoters of the company.

Responding to the allegations of fraud, Binani Cement legal advisor Sameer Kaji told BusinessLine: “It is surprising that the resolution professional (RP) has raked up the issue now, when the company is trying to repay the entire money to the lenders by executing an out-of-court deal with UltraTech Cement.”

Dismissing the allegations made by the RP, Kaji said the joint lenders’ forum had ordered a forensic audit of Binani Cement’s financials in 2015-16 by Haribhakti & Co, which did not find any major discrepancies.

The Committee of Creditors called for another forensic audit from January 2016 to November 2017, which cast doubts on some inter-corporate deposits and related-party transactions. Qualifications were made under Section 66 regarding receipt of payment from customers.

“When the RP received the forensic audit report on March 13, why was it not disclosed to the Committee of Creditors when they met on March 15,” asked Kaji.

But the allegations have not dampened Dalmia Bharat and UltraTech’s resolve to win the bid for Binani. Mahendra Singhi, Group CEO, Dalmia Bharat Cement, said the revelation of a fraud is not surprising as Dalmia Bharat has done its due diligence and was aware of the ‘questionable’ transactions even before placing the bid for Binani Cement.

Asked whether the company is comfortable with a possible investigation of the fraud after the deal is done, Singhi said that even if that happens it would be targeted at the previous management.

According to Bloomberg, Dalmia Bharat has told the NCLT that Binani’s agreement with UltraTech is outside the resolution process.

Lack of transparency

Atul Daga, CFO, UltraTech Cement, said the company has already stressed on the lack of transparency in sharing data and the way the RP has conducted the entire process. “Our offer to buy Binani Cement is still valid as we look at the future prospects of business and not the conduct of existing management. However, everything will depend on the Court proceedings tomorrow (Thursday),” he added.

Dalmia Bharat has emerged as the highest bidder with an offer to pay ₹6,350 crore for Binani Cement. However, UltraTech Cement, which subsequently raised its bid to ₹7,266 crore, has moved the NCLT against the committee of creditors’ decision to reject its higher bid. It has also signed an out-of-court settlement with the promoters to buy Binani Cement.

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