The National Company Law Tribunal (NCLT) has asked the Enforcement Directorate (ED) to free up attached properties that were linked to fraud but not mortgaged to its lenders by a defaulting and insolvent borrower.
The ED had attached Rs 100 crore worth of property of REI Agro, once a prominent rice processing unit, for alleged money laundering. The company could not repay bank loans since 2013.
“The liquidator must get possession of those properties attached by the ED, Delhi,” said Madan Gosavi, member judge from NCLT Kolkata.
“It is for this Tribunal to decide how the properties and assets of the corporate debtor under liquidation can be appropriated.”
About a year ago, the NCLT ordered liquidation of the company with no feasible resolution plan in sight. Anil Goel, founder of AAA Insolvency Professionals, was appointed as liquidator.
“The latest order should help move hundreds of stuck cases, which are yet to show any value for lenders despite the dedicated bankruptcy court’s order for liquidation,” said Goel.
The company reported Rs 1,076 crore of loss during 2015-16. Its standalone turnover for that year was Rs 521.79 crore.
It was alleged that REI Agro and its directors availed various credit facilities and limits from various banks under consortium arrangement, including UCO Bank, and defrauded the banks from 2013 onwards of Rs 3871.71 crore.
The ED said the funds were fraudulently diverted.
