A two judge bench of the Mumbai national company law tribunal (NCLT) has ordered the liquidation of the apparel maker Reid & Taylor (R&T) after none of the suitors to the company were able to garner the required funding guarantees to validate their interest in the company.
In a ruling on Tuesday judges Bhaskar Mohan and V Nallasenapathy said that investors have not been able to prove their net worth before the court giving the bench no option but to order liquidation of the company.
Liquidation of the company is in line with the suggestion by the resolution professional and creditors of the company after they failed to find a buyer for the company more than nine months after dragging it to NCLT.
Three entities namely an R&T employee association backed SPGP group, Mumbai based CFM Asset Reconstruction and Indian Gas that entered the fray late last month had evinced but failed to prove their net worth. M S Prasanna, general secretary of the employees association, did not respond to calls and a message on his phone.
Creditors were always doubtful of the intention of these companies because of their unclear bonafides and fear that erstwhile promoter Nitin Kasliwal who has been declared a wilful defaulter by banks could be bidding to get back the company through the back door.
Tuesday’s liquidation order now opens the door for selling the company as a going concern as hoped by the judges. R&T owes creditors led by Edelweiss ARC a total of Rs 4,100 crore. Bharat Patel led NBFC Finquest Financial Solutions also has 20% or about Rs 800 crore of the company’s debt.
