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The appointment of an Insolvency Resolution Professional (IRP) for Videocon Industries has sparked a row among top audit companies, with Alvarez & Marsal winning the bid but some others complaining that their bids were far lower.
The lenders, led by State Bank of India, invited bids from top audit and consulting companies Alvarez & Marsal, Deloitte, Price Waterhouse, KPMG, Grant Thornton, EY and BDO. These firms made presentations highlighting their experience in handling debt resolution.
Sources in audit firms said A&M’s initial offer was Rs 1.6 crore a month, made on Friday, which it reduced to Rs 80 lakh a month on Saturday after all bidders for the mandate objected to the initial offer. Grant Thornton had made the lowest bid of Rs 70 lakh a month, said a source. The IRP process is expected to last 10 months.
The meeting to appoint the IRP was taken by State Bank of India, and was attended by other banks such as ICICI Bank, IDBI Bank, Canara Bank, Corporation Bank and Central Bank of India.
A mail sent to A&M did not elicit any response. Videocon declined to comment.
The Reserve Bank of India had sent the first list of 12 companies to the National Company Law Tribunal (NCLT) in June, after these companies defaulted on loans. Videocon is part of the second list of 28 companies identified by the RBI for resolution under the Insolvency and Bankruptcy Code.
Altogether, RBI has asked banks to resolve debt of almost Rs 2,50,000 crore and set aside 50 per cent of these loans as provisioning. Reliance Communications also became a non-performing asset in the December quarter but is not on the RBI list. The banks will make 15 per cent provision for RCom’s Rs 44,700-crore loan.