NCLT Admits Insolvency Case Against BPSL Ex-Promoters

The Delhi bench of the National Company Law Tribunal (NCLT) has admitted insolvency proceedings against former Bhushan Power & Steel Ltd (BPSL) promoter Sanjay Singal and wife Aarti Singal. Admission of the proceedings against the Singals is an important step for banks seeking to recover 1 Rs. 2,500 crores each from the duo over the personal guarantees issued for loans taken by the company.

In a hearing on Tuesday, the NCLT bench granted interim moratorium on the loans and confirmed Reshma Mittal as the resolution professional (RP), in a petition filed by lead lender State Bank of India. The RP will now verify the details of the case and seek a final approval from the NCLT to start prosecution proceedings.

This is the second high-profile insolvency case invoking personal guarantees of defaulting promoters. The first was against Videocon promoter Venugopal Dhoot, on September 1.

Singals or their lawyers could not be reached immediately for comment Tuesday.

Cyril Amarchand Mangaldas is representing SBI in the case. Biswajit Dubey appeared on behalf of the law firm Tuesday.

Banks’ efforts at maximizing recoveries have been boosted by the Supreme Court’s order in May endorsing invoking of personal guarantees of defaulting promoters under the bankruptcy law. S-ET

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