RP of Reid & Taylor moves NCLT, files criminal case against promoters

The resolution professional of Reid & Taylor has approached the Mumbai Bench of the National Company Law Tribunal (NCLT) with a criminal action lawsuit against the promoters for a fraud of ~1,810 crore. Venkatesan Sankaranarayan, the resolution professional, in his affidavit has said the promoters carried on the business of the corporate debtor with the intent to defraud the creditors. Moreover, he has sought the tribunal to order the promoters to not dispose off their personal assets  until the discharge of the liability.

He has asked the tribunal to hold the promoters of the company liable to contribute to the assets of the corporate debtor.

He has also asked the tribunal for an interim relief seeking that the promoters shall not dispose off any of their assets pending disposal of his application.

In the ongoing case against the promoters of the company, Kasliwal family-run S Kumar Group and Edelweiss Asset Reconstruction Company, the committee of creditors had decided to go for liquidation as no plans for resolution was submitted.

But the tribunal stalled the liquidation process and accepted the bid of an unregistered union of the company to take over the firm. The tribunal had posted the matter for further hearing on January 8.

The lenders to the company are Finquest Financial Solution, Union Bank of India, Punjab National Bank, IL&FS Financial Services, IDBI Bank and L&T Finance.

Edelweiss ARC dragged the company to NCLT in March 2018 over the nonpayment of dues to the tune of Rs 66 crore. The tribunal admitted the insolvency proceedings against the company in April 2018.

IDBI bank had initiated the insolvency proceeding against the promoters of the company nationwide over the nonpayment of dues to the tune of Rs 4100 crore to banks and other lenders.

The company is a fashion brand which sells premium suits, jackets, trousers, shirts, T-shirts, among others.