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Resolution professional alleges fraud by Binani Cement promoters

UltraTech says bidding for Binani Cement should be called off

Avishek Rakshit  |  Kolkata 

Binani cement
Binani Cement

The for has filed an application in the (NCLT), alleging fraudulent transactions involving the promoters of the company.

According to the application filed by Vijaykumar Iyer, external forensic consultant Haribhakti & Co was appointed in November for reviewing some transactions by

Iyer has alleged that the promoters of diverted funds through capital advances, inter-corporate deposits, loans and other means to related parties at preferential prices, which, in turn, affected the company’s working capital position.

The report of the consultant, dated March 12, 2018, has identified certain transactions as suspect, especially during the review period of July 1, 2015, to November 30, 2017, in respect of which further investigation will be required.

“The forensic consultant has observed that the corporate debtor has made sales to certain potentially related and/or connected customers and entities, with nil or marginal parallel collections,” according to the application.

Lawyers representing said the or his counsel had not served them a copy of the application in question and hence they could not comment on the issue.

As the transactions came to light, said bidding for should be called off.

Iyer also alleged that since the inception of the process for Binani Cement, he was not provided access to all information and documents required, and he had filed an application with the on December 21 about this.

UltraTech has negotiated a share purchase agreement with the promoters of subject to termination of insolvency proceedings. According to sources close to the consortium of lenders, the Rs 72.66-billion proposal mooted by to acquire 98.43 per cent stake in may be preferred by lenders as their interest earning from this deal could exceed the one they had approved during

If the lenders move the Supreme Court citing a better deal than the one agreed upon in the NCLT, Bank of Baroda, which dragged to the tribunal, would have to withdraw the case first, sources added.

After conclusion of the bidding process, a Dalmia Bharat Cement-led consortium was selected by the Committee of Creditors as the highest bidder. It had signed an agreement with the committee to take over

Based on the allegations made by Iyer, a source close to alleged that was pushing for a deal outside the purview of the so that it did not surface during the proceedings.

“The had provided incomplete information to the bidders and thus the entire bidding process and the results should be called off,” said Atul Daga, chief financial officer of

He claimed while was placing the bid, the did not inform the company that a forensic consultant had been appointed to look into such allegations.

On the other hand, sources close to claimed that after the Committee of Creditors voted in favour of its resolution plan, a letter of intent was issued by the for the takeover of

“According to the provisions in IBC and legally as well, they will have to honour the letter of intent”, the source said.

also provided a performance bank guarantee equal to 10 per cent of the upfront payment to be made to financial creditors as a term for acceptance of its letter of intent.

However, according to a source close to Binani Cement, unless the resolution professional’s counsel informs them about the application, in cannot be taken up in the even if it has been submitted.

The Kolkata bench will on March 22 hear all cases submitted by the resolution professional, Binani Cement, UltraTech Cement, operational creditors and others.


  • Vijaykumar Iyer alleges fraud by promoters; submits application to NCLT’s Kolkata bench
  • claims it hasn’t received any copy of the application
  • Sources close to Dalmia Bharat claim promoters want to settle the sale outside the purview of IBC to escape being pulled up for alleged fraud
  • UltraTech says bidding process should be called off; claims it was not aware of the allegations of fraud

First Published: Wed, March 21 2018. 07:00 IST