Sintex Industries: Sintex Industries resolution delay makes lenders wait longer for recovery

Mumbai: The ₹3,567-crore resolution of textile company Sintex Industries is awaiting NCLT approval five months after the committee of creditors approved its sale to a Industries-Acre ARC consortium, highlighting judicial delays plaguing the six-year-old Insolvency and Bankruptcy Code (IBC). The hearing in the case has been postponed five times by the Ahmedabad bench of NCLT, frustrating banks that are awaiting recovery from the account after approving the resolution plan of the RIL-Acre ARC consortium in March.

“An application for approval of resolution plan was first filed on March 23 and was listed on two days later. But since then, we have only seen adjournments in the case four times already,” said a person familiar with the case. “Two petitions for urgent hearing, the most recent in the first week of this month, have been rejected, causing the financial system a daily loss of ₹1 crore in terms of net present value (NPV) of the resolution plan.”

Lenders have the option to file an appeal in the NCLAT but delays even in the higher court has made bankers reluctant to take that step.

“The resolution professional had filed an application for early hearing to protect and preserve the assets. However, the NCLT Ahmedabad bench of judicial member Deepti Mukesh and technical member Ajai Das Mehrota declined, citing an objection from a shareholder which required more hearings and has adjourned the matter to September 5,” said a second person aware of the issue.

The said shareholder had opposed the decision, citing suspension of the company’s stock from trading before the case was admitted in NCLT which had caused him a financial loss.

“But the irony is that the court has already heard the shareholder in July and even in that case no order has been passed. So, we are moving in circles,” said a second person cited above.