Reid & Taylor insolvency: NCLT asks staffers to prove net worth by Thursday

The National Company Law Tribunal (NCLT) has told the employee association of Reid and Taylor and the investor, who is backing them in their takeover bid, they have time till Thursday to furnish documents regarding their net worth to acquire the company.

Australia-based Silverdale Services, a financial services company, is backing the bid made by the employee association to take over the company.

The tribunal has asked the investor to provide the financial statements of his company for the year 2016, 2017 and 2018 which has to be certified by a chartered accountant to substantiate his credibility of providing a resolution plan for the company.

Further, the tribunal has asked the resolution professional (RP) of Reid and Taylor to get in touch with two other investors who have expressed interest in the company. One of them is from UK and the other one is from US.

Moreover, Finquest Financial Solution, one of the financial creditors to Reid and Taylor has moved the appellate tribunal, National Capital Law Appellate Tribunal, against the eleven-day extension given for the corporate insolvency resolution process after the 270 day time period expired for a resolution proposal of the company. The matter is next slated to be heard by the appellate on the February 1.

Karl Tamboli was appearing on behalf of the employee association of Reid and Taylor and Zal Andhyarujina was arguing on behalf of Finquest Financial Solution. Animesh Bisht was representing the Resolution Professional.

Finquest Financial Services has an exposure of more than Rs 750 crore to Reid and Taylor. Other lenders to the company include Union Bank of India, Punjab National Bank, IL&FS Financial Services, IDBI Bank and L&T Finance.

The committee of creditors decided to go ahead with liquidation of the company in December,2018 as there was no resolution plan put forward.

The resolution professional of Reid & Taylor had earlier this month moved the Mumbai Bench of the National Company Law Tribunal (NCLT) with a criminal action lawsuit against the promoters for a fraud of Rs 1,810 crore as per the findings of the KPMG report.

Venkatesan Sankaranarayan, the resolution professional, in his affidavit had said the promoters carried on the business of the corporate debtor with the intent to defraud the creditors. Moreover, he hasd sought the tribunal to order the promoters to not dispose off their personal assets until the discharge of the liability.

KPMG in a special audit of the company uncovered that the promoter of Reid and Taylor – Nitin Kalsiwal – had carried out fraudulent transactions worth Rs 1,810 crore by undervaluing many inter and intra company purchases and additional write off of Rs 1713.88 crore without any evidence.