Tribunal directs liquidation of Nathella Sampath Jewellery

Photograph used for representational purposes only

Photograph used for representational purposes only   | Photo Credit: Getty Images/iStockphoto

In 2018, the company had filed a voluntary insolvency petition, with the total amount it owed standing at ₹461.40 crore

The Division Bench of National Company Law Tribunal (NCLT) Chennai has ordered liquidation of Nathella Sampath Jewellery Private Limited. In 2018, the company had filed a voluntary insolvency petition which was admitted by the NCLT.

Nathella had said it defaulted a sum of ₹385.37 crore to 58 financial creditors (banks), ₹67.25 crore to 62 operational creditors (vendors and suppliers) and other payable expenses include ₹8.32 crore. The total amount owed, comes to ₹461.40 crore.

In addition, the firm said an amount of ₹63.7 crore is due as on January 15, 2018, towards advance received from customers for supplies to be effected at a future date in the form of cash, gold and includes amounts received on instalment basis to be repaid within 11 months.

Ram Ratan Kanoongo, resolution professional said it has been difficult to find any resolution plan for the revival of Nathella and the committee of lenders had recommended liquidation with 97.90% voting in favour. He also pointed out that The Enforcement Directorate had provisionally attached 37 immovable properties valued at about ₹328.44 crore including all the properties mortgaged by the company with lenders, as well as that of directors, guarantors and related parties. The attachment was made under the Prevention of Money Laundering Act (PMLA) and the case is pending. Mr. Kanoongo said the 330-day deadline for the insolvency process expired on November 14 last year, and the process is at a standstill due to multiple proceedings pending.

NCLT ruled that ordering liquidation soon after completion of the insolvency period will not have any bearing on the PMLA proceedings, because action against erring management will not be affected by its order. It also asked The Insolvency and Bankruptcy Board of India to propose the name of a liquidator and said Mr. Kanoongo will act as liquidator still such time.

Meanwhile, Mr. Kanoongo has called the stakeholders of Nathella to submit their claims along with proof on or before February 9, 2020.

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Printable version | Feb 20, 2020 5:57:33 AM |

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