New Delhi: The National Company Law Tribunal (NCLT) has directed to liquidate debt-ridden dairy firm Kwality Ltd. The direction came after Kwality Ltd failed to finalise any bidder within the specified time-frame. The NCLT had directed to initiate insolvency proceedings against Kwality Ltd, December 11, 2018. It did so over the plea filed by the financial creditors Punjab National Bank (PNB) and KKR India Financial Services.
A two-member bench of the Delhi-based NCLT observed that despite extension in the insolvency timeline, the lenders of the Kwality failed to finalise any potential buyer for the company. The Committee of Creditors (CoC) had received only one resolution plan for the company from a consortium of Haldiram Snacks and Pioneer Securities, but the bid could not get approved with the required majority of 66 per cent votes of lenders.
Following this, its resolution professional (RP) Shailendra Ajmera, who is part of consultancy firm E&Y, had moved an application to initiate the liquidation process for the company as mandated under the Insolvency & Bankruptcy Code (IBC).
“In view of the facts and circumstances, this authority (NCLT) is satisfied that the application filed for initiation of liquidation proceedings against the corporate debtor (Kwality) is a fit case for ordering the liquidation of the corporate debtor namely Kwality Ltd in the manner laid down in IBC, 2016,” said a two-member NCLT bench comprising MS Tariq and NK Bhola.
The NCLT also appointed Ajmera as liquidator.
“The personnel of the corporate debtor are hereby directed to extend all corporations to the liquidator as may be required in managing the affairs of the corporate debtor,” the NCLT further said. As the liquidation order has been passed, no suit or other legal proceedings shall be initiated by or against Kwality without prior approval of the NCLT, it added.