New twist in Reid & Taylor saga: New company bids for resolution process

Mumbai, Jan 31 (IANS) In a fresh twist in the Reid & Taylor saga, a New Delhi-based company, Indian Gas Ltd, (IGL), was asked by the National Company Law Tribunal (NCLT), Mumbai, to bid for the resolution process of the debt-hit fashion major, here on Thursday.

The development came at the last minute after CFM Asset Reconstruction Pvt Ltd (CFMARPL), Ahmedabad, informed the NCLT that it was no longer interested in submitting the Resolution Plan.

While the NCLT bench comprising Judge Bhaskar P. Mohan and Judge V. Nallasenapathy ordered a refund of Rs 2 crore paid by it two weeks ago, it asked the new bidder IGL, registered in Chennai, to pay a non-refundable Rs 2 crore on February 5.

The judges also directed the IGL to appear before the NCLAT on February 1 to prove its bonafides and interest in investing in the Resolution Process of Reid & Taylor.

This is significant since one of the largest investors in Reid & Taylor, Finquest Financial Solutions, had moved the NCLAT challenging the NCLT Mumbai's order asking CFMARPL to participate in the Resolution Process although the statutory 270 days period was over.

The NCLAT had issued notices to all concerned parties and has kept the matter for further hearing tomorrow.

The NCLT has asked the IGL to prove its networth of over Rs 50 crore by February 5. Earlier, IGL had claimed before the court that their networth was Rs 1,500 crore.

However, Finquest Financial Solutions had questioned IGL's claim to participate in the Resolution Process, with its counsel Zal Andhyarujina urging that the 270-day period should not be extended under any circumstances and also since his clients (Finquest Financial Solutions) felt that IGL's interests are questionable.

In order to prove his contention, Andhyarujina said that against the IGL's claim of Rs 1,500 crore networth, their balancesheet shows a networth of only Rs 6 crore.

To this, the NCLT bench said it was allowing IGL's claim after hearing more than 50 per cent creditors of Reid & Taylor.

However, the judges warned that in case IGL is unable to deposit the Rs 2 crore and prove its networth of over Rs 50 crore by February 5, it would be construed as misrepresentation to get an adjournment and the bench would not hesitate to launch criminal proceedings of cheating against them.

Earlier a Hong Kong-based SPGP Holdings, which had claimed a networth of Rs 70 crore, was later calculated to be only around Rs 7 crore.

In December, the creditors' committee had moved the NCLT for liquidation of Reid & Taylor as no credible investors were ready to submit a resolution plan for the debt-hit big fashion brand.

But, the Reid & Taylor Employees' Association, backed by SPGP Holdings, had requested the NCLT for an opportunity to help bail out the company by submitting a resolution plan, but it failed to materialise, paving the way for CFMARPL.

After CFMARPL backed out today, the IGL has now stepped into the picture.

(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)