Insolvency proceedings ordered against Kanishk Gold

A file photograph of the Kanishk jewellery building in Chennai

A file photograph of the Kanishk jewellery building in Chennai   | Photo Credit: R. Ragu

A case filed by the State Bank of India said the company owes about ₹311.49 crore as on July 9, 2019

The Division Bench of National Company Law Tribunal (NCLT) has ordered insolvency proceedings against Kanishk Gold Private Ltd, in a case filed by State Bank of India.

According to the petition the company had availed of credit facilities from a consortium of banks, with SBI as a lead bank. SBI said the company owes it about ₹311.49 crore as on 09.07.2019.

The other banks in the consortium include Punjab National Bank, Bank of India, IDBI Bank, Syndicate Bank, Union Bank of India, UCO Bank, Central Bank of India, Corporation Bank, Bank of Baroda, Tamilnad Mercantile Bank, HDFC Bank and Andhra Bank.

Incidentally, SBI on behalf of the consortium had filed a petition against the company before the Debt Recovery Tribunal, in which it said the company owes the banks ₹842.47 crore as on 31.1.2018. SBI and other banks had declared the loans as a non-performing asset.

NCLT admitted SBI’s petition and has named Ebenezar Inbaraj as the interim insolvency professional. Under the insolvency process, a maximum of 330 days is given to find a suitable plan to revive the company. If it fails, the company goes into liquidation.

In 2018, Enforcement Directorate had arrested Kanishk Gold Managing Director Bhupesh Kumar Jain over allegations of defrauding the banks. It also attached the properties worth ₹281 crore belonging to Kanishk Gold and its promoters under the Prevention of Money Laundering Act (PMLA).

An FIR was also registered by the CBI’s Banking Securities (BS) and Fraud Cell, Bengaluru, against Jain, his company and others.

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Printable version | Apr 4, 2020 1:14:54 PM |

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