Jaiprakash Associates says no fraud in providing Jaypee Infra's land as collateral

Crisis-hit Jaiprakash Associates Ltd (JAL) today said the company provided certain land parcels of its subsidiary Jaypee Infratech as additional collateral to its lenders and the mortgage transactions could not be termed as "fraudulent".

The Allahabad bench of National Company Law Tribunal (NCLT) last week passed an order directing JAL to return nearly 760 acre land to Jaypee Infratech Ltd (JIL), while declaring the transfer of the land as "fraudulent" and "undervalued".

The order came over a petition filed by bankruptcy -hit JIL's resolution professional (RP) Anuj Jain seeking direction over the transactions entered by the firm's promoters, creating mortgage on its 858 acre to secure debt for JAL.

NCLT directed JAL to return only 759 acre out of total 858 acre as it found that the transaction related to 100 acre in Aligarh district was entered before the start period of corporate insolvency resolution process (CIRP). Last year, NCLT had admitted an application of IDBI Bank-led consortium to initiate insolvency proceedings against JIL.

In a regulatory filing, JAL said the company has "raised loans against the security of its own assets and the impugned land was mortgaged only as a collateral security as desired by the lenders".

It added: "There is no undervaluation or stripping off of the assets of JIL and no preferential treatment has been given to any creditor of JIL against others."