Insolvency resolution professionals appointed by the tribunal who is hearing an insolvency petition of Jaypee Infratech has accused the ailing company of “fraudulently and wrongfully” mortgaging 858 acre land to secure loans for Jaiprakash associates, its parent company. They have also alleged that the company was intentionally indulged in such transactions which amounted to “asset stripping”. The IRP further said that “the land was valued at Rs 5,000 – 6,000 crore and was mortgaged to secure loans taken by Jaiprakash Associates Ltd. from SBI, ICICI bank and Standard Chartered bank.” This move was took place at the time when banks started classifying loans taken by Jaypee Infratech as a “Non-performing asset” due to the loan defaults. The company also has a liability of Rs. 132 crore to fixed deposit holders and is also running behind the schedule in delivering flats to home buyers.
In the petition filed by IRP, the court has appointed a professional for identifying the land which could have been sold or mortgaged to raise funds and complete the construction of flats and prevent value erosion. Out of 33,000 odd apartments which were supposed to be delivered by the company, nearly 25,000 are yet to be completed. The construction is delayed until 2021.
While accusing the directors of failing to exercise due diligence before the tribunal, it could not find approvals which were “obtained from the lenders to Jaypee Infratech to mortgage the land” in favour of banks that the Jaiprakash associates had lent. While alleging that the mortgage was “fraudulent and wrongful transaction” under section 66 of the insolvency and bankruptcy code, it has also described it as an “undervalued and preferential transaction” as described in the law that was enacted a little time ago.
Courtesy/By: Sanchita Mukherjee
|
09 Feb 2018
