NCLT orders freezing of assets of Arvind Dham, Metalyst ex-directors

Industry:    2021-09-17

The National Company Law Tribunal (NCLT) has ordered a countrywide search and freeze of the assets of Arvind Dham and other former directors of Metalyst Forgings, a listed subsidiary of Amtek Auto Ltd.

The order was in response to a petition filed by the ministry of corporate affairs (MCA) against the bankrupt group. According to the ministry, an independent audit had pointed out allegedly questionable financial transactions of Rs 3,454 crore by the erstwhile management.

The tribunal has now directed the Central Board of Direct Taxes (CBDT) and Indian Banks Association (IBA) to disclose all the assets of the respondents for the purpose of freezing.

The tribunal has also directed the erstwhile promoters of the Amtek Auto Group, Arvind Dham and other former top executives including chief financial officer Arun Kumar Maiti, Sanjiv Bhasin, John Ernest Flimtham and Gautam Malhotra, among others, to disclose on affidavit their moveable and immovable properties.

“This bench has noted that the UoI (Union of India) has taken initiative to curtail the acts of preferential and fraudulent transactions by way of present petition in the best possible manner and the public interest,” said the division bench of Bhaskara Pantula Mohan and Narender Kumar Bhola in their 12-page order that became available on Thursday.

Sanjay Shorey, director for legal & prosecution at the MCA, while appearing along with Manmohan Juneja, Officer on Special Duty (OSD) in the ministry, argued that Amtech Auto Ltd holds 54.24% share of Metalyst Forgings and the ministry has also moved a similar petition under Section 241, 242 against the parent company and other group subsidiaries as well.

Under Section 241 of the Companies Act, if the central government is of the opinion that the affairs of a company were being conducted in a manner prejudicial to the public interest, it could approach the NCLT to seek relief.

In December 2017, the company was admitted under the Corporate Insolvency Resolution Process in a petition filed by the State Bank of India. Dinkar T Venkatasubramaniam was then appointed as the interim resolution professional of the company.

Lenders to the group have approved a revival plan submitted by US-based hedge fund Deccan Value Investors for about Rs 2,700 crore. The Amtek Group owes more than Rs 13,000 crore to lenders and was among the 12 debt-laden companies initially taken to the NCLT as per Reserve Bank of India’s direction in 2017.

print
Source: