Lenders to Amtek Auto on Wednesday asked the National Company Law Tribunal (NCLT) to restart the resolution process for the company as the lone bidder — Liberty House — failed to make any payment.
The lenders have also asked for exclusion of the period Liberty House spent in considering the bid while taking into account the 270-day resolution period as mandated under the bankruptcy code for debt resolution.
Liberty House was declared the highest bidder for Amtek Auto in July last year after it made a Rs 4,200 crore bid for the company but failed to pay any amount to the banks, leading to banks filing a prosecution application in the NCLT against the firm. The Section 74 (3) of the IBC was triggered by banks when the bidder defaults on a court-approved plan.
According to a source close to the development, the NCLT on Wednesdsay declined to entertain the application of the London-based-company, challenging the valuation of assets of Amtek Auto and questioning the quality of information provided to it during the bankruptcy process.
Liberty House argued that there was a huge gap between the book value of fixed assets as per Amtek’s balance sheet and liquidation value of fixed assets given by the valuer appointed by the resolution professional RP.
The UK company claimed it realised the valuation gap on a visit to the plant after the plan was approved by the NCLT.
The allegations of Liberty House were refuted by the committee of creditors (CoC) and RP counsels who said Liberty House was fully aware of the book value of assets and the liquidation value through the information memorandum. “It was for Liberty House to make its own valuation estimate before submitting the plan. The value of assets is always likely to be lower than the book value for the commencement of the insolvency process,” said the source.
When contacted, a Liberty House official said the NCLT heard some of the serious issues raised by it which were material and, as per Liberty, completely vitiated the approval of the Amtek resolution plan.
The forensic audit should have been done before approval of the resolution plan but that did not happen. These facts should have been placed before the NCLT prior to the resolution plan’s approval, Liberty said.
Liberty House also reiterated its commitment to revive Amtek provided the information memorandum, which is now seen as vitiated by gross misrepresentation, is corrected.