A bankruptcy court has ordered the liquidation of Ezeego One Travel & Tours Ltd as the secured creditors of the online travel portal did not receive any viable revival plan for the company.
The Mumbai bench of the National Company Law Tribunal (NCLT), while allowing an application to admit the company for liquidation, appointed the company’s resolution professional Gaurav Ashok Adukia as its liquidator.
“We are of the considered opinion that this is a fit case for liquidation and, therefore, we hereby order the liquidation of the corporate debtor,” a division bench of judicial member Kuldip Kumar Kareer and technical member Shyam Babu Gautam said in its order of April 13.
Ezeego One Travel was admitted for the resolution process on March 9, 2021, on a plea filed by Yes Bank. The company is an affiliate of Cox & Kings Ltd and owes more than Rs 1,078 crore to lenders.
Yes Bank had approached NCLT after Ezeego One Travel defaulted on its term loans in April 2019.
Legal experts indicated that liquidation of the company may not bring in much value for the creditors.
“An Internet travel company would likely have very limited fixed assets. In companies like these, intellectual properties such as brands and tech assets such as source codes are the only assets,” said Mallika Noorani, senior partner at law firm Parinam Law & Associates. “With the passage of time, if such assets are not used, they become less valuable.”
According to Nipun Singhvi, managing partner of law firm NSA Legal, dot-com companies like this that are into the asset-light model have fewer chances of revival as the shelf life deteriorates, and a quick liquidation may yield results at least for intellectual property rights.
Ezeego One Travel, promoted by Ajay Ajit Peter Kerkar and Urshilla Kekar, is also facing investigation by the Central Bureau of Investigation and the Enforcement Directorate.
Yes Bank had filed an FIR against Ezeego One Travel for allegedly defrauding the bank of more than Rs 900 crore.
Ajay Kerkar was arrested over multiple charges of fraud and financial irregularities. Last month, a special court under the Prevention of Money Laundering Act granted him temporary bail.
BSE-listed Cox & Kings Ltd was admitted for insolvency resolution in October 2019. In the absence of any viable resolution plan, in December 2021 the tribunal ordered liquidation of the company. It owes more than Rs 7,422 crore to financial and operational creditors.
