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SKIL Infrastructure Ltd, the erstwhile promoters of Pipavav Defence and Offshore Engineering Co Ltd, have filed a suit in the commercial court in Ahmedabad seeking to reverse a decision by a consortium of 25 banks. Led by IDBI Bank it seeks to invoke the shares pledged by them for payment default by the new promoters of the ship yard in Gujarat’s Amreli district.
The yard was acquired by Anil Ambani-led Reliance Group in January 2016, after which the facility was first renamed Reliance Defence and Engineering Ltd and then to Reliance Naval and Engineering Ltd.
SKIL has termed the action of the lenders to take over their pledged shares as “unjustified, wrong and illegal.”
On Monday, Reliance Naval informed the stock exchanges that the erstwhile promoters — Nikhil Gandhi and Bhavesh Gandhi — ceased to hold any equity shareholding in the company as on June 30, 2018.
Nikhil Gandhi stepped down as non-executive director on the board of Reliance Naval in February followed by Bhavesh in March. The erstwhile promoters held the two board seats even after the company was acquired by the Reliance Group.
New promoter
SKIL signed an agreement with the Reliance Group in March 2015 and after various approvals, the transaction was consummated in January 2016. Reliance was accepted as the new promoter by the lenders.
The agreement stipulated that within three months of completion of the transaction, the shares pledged with the lenders by the erstwhile promoters to secure the debt of Pipavav Defence will be released.
From April 2016 onwards, SKIL reminded the banks to release their pledged shares since they were no longer the promoters or managing the company.
SKIL wrote 17 letters but none of them has ever been acknowledged let lone responded/replied, the company wrote in the papers filed with the court. “SKIL kept on writing to the banks and waited but nothing happened for more than two years. And then, suddenly in March this year, the lenders moved with “alacrity” to invoke the pledged shares, the company submitted.
The pledged shares, along with the corporate and personal guarantees, were invoked by the lenders on 17 March, the day the Ahmedabad court was hearing the case, despite a plea from SKIL’s lawyer to desist from doing so since the matter was sub-judice. BusinessLine has reviewed the papers.
The “unusual and unprecedented step” poses a question mark on the judgment and intention of the lenders, say legal experts.
“SKIL is not the owner of the company nor is it running the company, or a borrower. The lenders have given the approval for Reliance to become the new promoter of the company. Why should SKIL be penalised for the default of the company, which is now run by Reliance?, a Mumbai-based lawyer said, asking not to be named.
SKIL said its shares were “wrongfully” withheld by the lenders for more than two years.
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