NCLT asks RTIL investor amount it can deposit as earnest money

The National Company Law Tribunal (NCLT) has asked SP Growth Partners (SPGP), an investor in the bankrupt premium apparel brand Reid & Taylor (RTIL), to inform the bench how much it can deposit as the earnest money deposit (EMD) before filing the resolution plan.

The Mumbai NCLT bench headed by Bhaskara Pantula Mohan and V Nallasenapathy had earlier told the Hong Kong-based SPGP to deposit Rs 50 crore as EMD, but consequently reviewed it.

SPGP is also a co-applicant with the RTIL Employees Welfare Association to take over the company, whose creditors had voted for liquidation, as none of the eight parties who presented their expressions of interest presented a resolution plan.

At the previous hearing, the NCLT had directed the Employees Welfare Association of Reid & Taylor to produce the certified financial accounts of SPGP for 2017-18.

The documents submitted by SPGP showed the company's networth as Rs 7 crore against its claim of around Rs 70 crore in an affidavit filed earlier. This prompted the bench to ask them for an EMD of Rs 50 crore to prove it can submit a resolution plan.

Reid & Taylor India, owned by the Kasliwal family-run S Kumar Group owes over Rs 4,100 crore to lenders.

The committee of creditors, who include Finquest Financial Solution, which is the largest with close to Rs 800 crore of claims, Union Bank of India, Punjab National Bank, IL&FS Financial Services, IDBI Bank and L&T Finance etc, had on December 14, 2018 voted for liquidation.

Edelweiss ARC had taken the company to NCLT in March 2018. Besides, Arcil and JM Financial ARC also have exposure to RTIL.