US-based Formation Textile, who won the bid for Mandhana Industries has now moved to NCLT (National Company Law Tribunal) Mumbai regarding the transparency of the insolvency proceedings.
The company has alleged that consortium of lenders led by Bank of Baroda as well as its resolution professional have acted fraudulently during the insolvency process by hiding facts to get a higher offer for the assets.
An application by Formation Textiles reads, “After the takeover of the control and management of MIL, the applicant has realised that the CoC and the Resolution Professional have, during the CIRP of MIL, deliberately, fraudulently and willfully suppressed material facts and information from the applicant.”
It claims that the financial position of the assets was concealed to give a real picture which the US bidder found out to be much lower afterwards. Information related to the ongoing litigation and investigation initiated by the government and statutory authorities such as the Income Tax and customs departments, disputes by and against Mandhana as well as the prospective liabilities of the company were also not presented.
The company wants NCLT to allow it to modify the plan to make it viable, according to the actual information associated with the performance of the company.
Image Source: https://insidesmallbusiness.com.au