In a new twist to the ongoing bankruptcy saga of RTIL (formerly Reid & Taylor (India) Ltd), its employees’ association has accused the Resolution Professional (RP) and financial creditor Finquest Financial Solutions of trying to stall its resolution process.
In a letter addressed to the chairperson of the Insolvency and Bankruptcy Board of India (IBBI), the RTIL Employees Welfare Association has alleged that the RP, and Bharat Patel, a creditor, are “hand-in-glove”, intending to liquidate RTIL.
This is also to close down the RTIL’s operations for a “couple of months,” it added. The letter, dated January 4, 2019, was also copied to the Union Minister of State for the Law and Justice and the Ministry of Corporate Affairs P P Chaudhary.
BusinessLine has reviewed a copy of the letter, while a spokesperson for the employees association also confirmed that the letter was sent to IBBI Chairperson M S Sahoo.
Earlier in April 2018, admitting RTIL’s bankruptcy petition, the Mumbai bench of the National Company Law Tribunal (NCLT) had appointed Venkatesan S as the RP.
Finquest’s status
The letter also said that Finquest is the assignee of two debts availed by S Kumars Nationwide Ltd (holding company of RTIL) from India Debt Management and ICICI Bank, and thus it has claimed to be a financial creditor of the company by virtue of the charge they hold on the fixed assets of RTIL. It appears that the RP has admitted its claims as financial creditors though no money was said to have been lent by Finquest to RTIL, the letter said. The spokesperson of Finquest has strongly refuted the allegations made by the employee’s association, adding that they are baseless and putting a question mark on the authority of the RP appointed by the NCLT for the resolution of the corporate debtor. He further stated the intention behind such allegations was to divert the attention of the judiciary and protect the interest of the promoter, with whom they are associated for the last 20 years, who has been declared as willful defaulters by the bankers.
The employees association also complained to IBBI that the RP has allowed RNTD Distributors, a distributor to RTIL, to take control of the company and undertake job works at throwaway rates. This is slated to further impair the firm, it added. At present, there are two bidders for RTIL, a UK-based unnamed investor and Hong Kong-based SPGP Holdings (HK) Ltd. At the hearing at NCLT Mumbai on Tuesday, SPGP Holdings was asked to submit the financial documents in case it intends to bid for RTIL.